2 Top Growth Stocks in Canada for September 2023

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Written by Jitendra Parashar at The Motley Fool Canada

Most Canadian growth stocks have staged a recovery in 2023 after witnessing a steep sell-off in the previous two years. While macroeconomic uncertainties and the possibility of a recession, which were responsible for driving growth stocks lower in 2021 and 2022, aren’t completely over yet, other factors are driving a rally in growth stocks. Notably, early signs of easing inflationary pressures and hopes that the central banks in Canada and the United States might soon ease their monetary stance are boosting investors’ confidence this year. Given these drivers, it could be the right time for you to add such fundamentally strong stocks to your portfolio, as many of them still look cheap.

In this article, I’ll talk about two of the best Canadian growth stocks you can buy in September 2023 to expect healthy returns on your investments in the long term.

My first Canadian growth stock pick for September 2023

Lightspeed Commerce (TSX:LSPD) is my first Canadian growth stock pick for September. After witnessing 78% value erosion in the previous two years, the shares of this Montreal-headquartered commerce platform provider have gained 15.4% in 2023 so far to currently trade at $22.33 per share with about $3.4 billion in market cap.

Besides macroeconomic concerns, a massive sell-off in LSPD stock started in the final quarter of 2021 after a New York-based short seller, Spruce Point Capital, released a critical report about Lightspeed’s management and business practices. While the allegations made by Spruce Point in its short report didn’t make any major change in Wall Street analysts’ opinion about Lightspeed, they seemingly negatively affected retail investors’ sentiments, triggering a big sell-off in the stock.

Nonetheless, Lightspeed’s financials continue to improve at a fast pace nearly two years after the release of that short report, helping it regain investors’ confidence. In the June quarter, the company’s total revenue grew positively by more than 20% YoY (year over year) despite inflationary pressures and other economic challenges, reflecting its ability to continue growing even in a difficult business environment.

As this strength in its financial growth trends continues to steer Lightspeed towards profitability in the coming quarters, I expect LSPD stock to keep soaring.

And another top growth stock in Canada to buy today

OpenText (TSX:OTEX) could be another attractive growth stock in Canada to consider right now. The shares of this Waterloo-based information management firm have seen 36.3% year-to-date gains to currently trade at $54.69 per share, taking its market capitalization to $14.8 billion.

In its fiscal year 2023 (ended in June), OpenText’s total sales jumped 28.4% YoY to a record US$4.5 billion with the help of solid growth in its annual recurring revenues. With this, the company posted US$3.29 per share in adjusted annual earnings, exceeding Street analysts’ estimates.

Moreover, OpenText’s AI (artificial intelligence)-powered enterprise software solutions are fast gaining popularity across the globe. The growing demand can positively contribute to its financial growth in the coming years. Considering these strong fundamentals, I find OTEX stock attractive to buy for the long term, even after it has risen more than 36% so far this year.

The post 2 Top Growth Stocks in Canada for September 2023 appeared first on The Motley Fool Canada.

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The Motley Fool recommends Lightspeed Commerce. The Motley Fool has a disclosure policy. Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.