2 discounted TSX stocks to beat the market

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Most Canadian equities have lost significant value due to recent market sell-offs on fears of an economic slowdown. This drop presents an attractive opportunity for investors to buy the best TSX stocks at a discount. While the uncertain macroeconomic environment may continue to play spoilsport in the near term, a few may rebound strongly as the economic and geopolitical environment improves.

So, for investors with a long-term investment outlook and an appetite for risk, here are two battered TSX stocks with solid growth potential.

Speed ​​of light

Company actions facilitating trade Speed ​​of light (TSX:LSPD)(NYSE:LSPD) are an attractive investment at current levels. Lightspeed’s stock is down more than 82% from its 52-week high. While its stock has lost value, its business continues to perform, reflected in its strong organic sales.

It’s worth mentioning that Lightspeed saw organic growth of 38% in the first quarter of fiscal 2023, which was within its previous guidance range of 35-40%.

Lightspeed’s omnichannel commerce platform positions it well to benefit from greater e-commerce penetration and increased in-store and restaurant purchases. Notably, its two core offerings, Lightspeed Retail and Lightspeed Restaurant, continue to see strong demand.

Additionally, growing its customers, improving software adoption, increasing GTV (gross transaction volume) processed through its payment solutions, and accretive acquisitions will likely support its growth. Additionally, existing customers adopting its multiple modules and entering new geographies and verticals bodes well for growth.

While Lightspeed’s business and operational metrics remain strong, its stock is trading low on the valuation front. Lightspeed shares are trading at the next 12-month EV-to-sales (enterprise value to sales) ratio of 2.9, well below its historical average of 15.

Overall, Lightspeed’s solid growth and low valuation support my bullish outlook and position it well to outperform the broader markets.

Blackberry

With most tech stocks losing value, my next pick also comes from the tech sector. I am optimistic about Blackberry (TSX:BB)(NYSE:BB), and there are solid reasons why it could beat the broader market averages.

BlackBerry is well positioned to capitalize on higher enterprise spending on cybersecurity in the context of the ongoing digital transition. Additionally, vehicle electrification and automation provides a multi-year growth platform for the company. Its solid revenues from recurring products, its growing potential market, its ability to acquire customers and its high retention rate are positive elements.

With continued business momentum and visibility into future demand, BlackBerry expects to grow revenue at an average annualized rate of 13% through 2027. This forecast includes IoT (Internet of Things ) growing at a CAGR (compound annual growth rate) of 20% and cybersecurity sales are growing at a CAGR of 10%. Additionally, BlackBerry expects to increase its gross margins by approximately 100 basis points per year over the same period.

Given the sell-off in tech stocks, BlackBerry has lost 43% of its value and is trading at an EV/sales multiple of 5.5, which is below its historical average, presenting a solid buying opportunity.

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