3 High Growth Canadian Tech Stocks to Watch

The Canadian market has seen a significant recovery since the early August correction, supported by an expanding economy, positive earnings growth, and a favorable monetary policy environment. As tech heavyweights face lofty expectations and potential deceleration, investors are shifting their focus to high-growth opportunities among smaller tech companies that could benefit from the current economic resilience.

Top 10 High Growth Tech Companies In Canada

Click here to see the full list of 22 stocks from our TSX High Growth Tech and AI Stocks screener.

Let’s dive into some prime choices out of from the screener.

Simply Wall St Growth Rating: ★★★★☆☆

Overview: Cineplex Inc., along with its subsidiaries, operates as an entertainment and media company in Canada and internationally, with a market cap of CA$697.34 million.

Operations: Cineplex generates revenue through three primary segments: Media (CA$120.16 million), Location-Based Entertainment (CA$132.08 million), and Film Entertainment and Content (CA$1.05 billion). The company’s diverse revenue streams highlight its multifaceted approach to the entertainment industry in Canada and beyond.

Cineplex reported Q2 2024 revenue of CAD 277.34 million, down from CAD 367.92 million a year ago, with a net loss of CAD 21.44 million compared to net income of CAD 176.55 million last year. Despite current unprofitability, earnings are forecast to grow by an impressive 179.27% annually over the next three years, and revenue is expected to increase by 8.1% per year, outpacing the Canadian market’s growth rate of 6.9%. The company has also initiated a share repurchase program for up to 6.32 million shares, reflecting confidence in its future prospects amidst ongoing industry challenges and evolving consumer behaviors in entertainment consumption.

Simply Wall St Growth Rating: ★★★★☆☆

Overview: Computer Modelling Group Ltd. is a software and consulting technology company specializing in the development and licensing of reservoir simulation and seismic interpretation software, with a market cap of CA$1.04 billion.

Operations: Computer Modelling Group Ltd. generates revenue primarily through the development and licensing of reservoir simulation and seismic interpretation software, amounting to CA$90.29 million. The company also offers related consulting services, contributing to its overall financial performance.

Computer Modelling Group (CMG) has demonstrated robust growth, with earnings forecasted to increase by 24.6% annually over the next three years, outpacing the Canadian market’s 15.4%. Notably, CMG’s revenue is projected to grow at an annual rate of 11.5%, significantly higher than the market average of 6.9%. The company’s R&D expenses have been pivotal in driving innovation; for instance, their comprehensive carbon capture and storage (CCS) solution was recently selected by Sval Energi AS for a major project in the Norwegian North Sea.

Simply Wall St Growth Rating: ★★★★★☆

Overview: Constellation Software Inc., along with its subsidiaries, acquires, builds, and manages vertical market software businesses across various regions including Canada, the United States, Europe, and internationally, with a market cap of CA$93.26 billion.

Operations: Constellation Software Inc. generates revenue primarily from its vertical market software businesses, with a significant focus on the Software & Programming segment, which contributed CA$9.27 billion. The company’s operations span Canada, the United States, Europe, and other international markets.

Constellation Software’s earnings are projected to grow at 23.6% annually, outpacing the Canadian market’s 15.4%. Their R&D expenses, crucial for innovation, accounted for $1.12 billion last year, supporting advancements across their diverse software segments like ERP and CRM solutions under Omegro. Revenue grew by 16.2% annually with a notable Q2 increase to $2.47 billion from $2.04 billion a year ago, reflecting strong operational performance and strategic acquisitions enhancing their market position in various software applications globally.

Key Takeaways

• Reveal the 22 hidden gems among our TSX High Growth Tech and AI Stocks screener with a single click here.
• Got skin in the game with these stocks? Elevate how you manage them by using Simply Wall St’s portfolio, where intuitive tools await to help optimize your investment outcomes.
• Invest smarter with the free Simply Wall St app providing detailed insights into every stock market around the globe.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data
and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your
financial situation. We aim to bring you long-term focused analysis driven by fundamental data.
Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
Simply Wall St has no position in any stocks mentioned.

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