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3 Growth Stocks That Could More Than Double Their Revenue by 2025

A stock price graph showing growth over time
Image source: Getty Images.

Written by Christopher Liew, CFA at The Motley Fool Canada

Growth investors should watch out for Hammond Power Solutions (TSX:HPS.A), Sylogist (TSX:SYZ), and Blackline Safety (TSX:BLN). Their top lines are rising tremendously, and the stocks could deliver far superior returns in 2024 and beyond.

Standout growth stock  

Hammond Power Solutions is Canada’s standout growth stock in 2024. At $156 per share, the year-to-date gain is 91.18%, while the three-year return is 1,448.54%. This $1.85 billion company manufactures dry-type transformers, power quality products, and related magnetics.

The products are sold to clients in North America, Asia, and EMEA (Europe, the Middle East, and Africa). Revenue has been consistently growing in the last three years. Total revenue in 2023 was 86.8% higher than in 2021.

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For the full year, sales and net earnings jumped 27.1% and 41.4% to $710 million and $63.9 million. Also, Hammond established a new record in the fourth quarter (Q4) of 2023 with $187 million in sales.

Profitable organic growth

Sylogist outperforms the TXS year to date at +30.85% versus +4.59%. At only $9.51 per share, you get the best deal. The $228.8 million Software-as-a-Service (SaaS) company provides purpose-built software solutions for the public sector, healthcare, and non-profit organizations.

The business thrives, as evidenced by the consistent revenue growth in the last three years. Sylogist’s revenue in 2023 is nearly 70% more than the $38.67 million revenue in 2021. In the 12 months ending December 31, 2023, total revenue increased 16.1% to $65.5 million versus 2022.

Notably, recurring and SaaS revenues climbed 10.2% and 26.1% year over year to $40.2 million and $26.1 million. “Our team delivered continuing strong results in Q4 and throughout 2023, pushing forward our plans to make Sylogist into a SaaS leader in the public sector,” said Bill Wood, chief executive officer (CEO) of Sylogist.

Wood said Sylogist will remain focused on profitable organic growth while being prepared to seize strategic opportunities for scale or innovation. He added that all metrics, such as annual recurring growth, margins, net revenue retention, and customer net promoter score, trended to new highs, and he anticipates them to sustain the momentum in 2024.

Path to sustained profitability

Blackline Safety is right up the alley of more frugal or thrifty growth investors. This $302.2 million company, a major player in connected safety technology, manufactures gas detectors, area monitors, and lone worker devices in-house. At $4.15 per share (+16.9% year to date), market analysts recommend a buy rating. They forecast an upside potential between 38.6% and 68.7%.

The $100 million revenue in fiscal 2023 is 37.1% higher than in 2022 and nearly double the $54.3 million in fiscal 2021. If we’re looking at 2025, it should follow the same growth trajectory. In Q1 fiscal 2024, revenue and annual recurring revenue rose 26.3% and 37% year over year to $26.3 million and $54.2 million.

According to management, it was the 28th consecutive quarter of year-over-year revenue growth. Gross profit climbed 40% to $14.6 million from a year ago, while net loss declined 25% to $5.79 million compared to Q1 fiscal 2023.

Blackline’s Chairman and CEO, Cody Slater, expects another record year in fiscal 2024. Expanding across the utilities, industrial, and energy sectors should further contribute to Blackline’s path to sustained profitability.

Outsized gains

Growth investors with varying budgets have three profitable options this April. Now is the best time to snag Hammond, Sylogist or Blackline for significantly higher price-appreciation potential.

The post 3 Growth Stocks That Could More Than Double Their Revenue by 2025 appeared first on The Motley Fool Canada.

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Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Hammond Power Solutions and Sylogist. The Motley Fool has a disclosure policy.

2024