Top Canadian Growth Stocks to Invest In

Growth stocks are companies that are growing at a faster rate than the average company in their industry. Because they have high potential for long-term upward growth, they can become a source of immense wealth for investors, especially if you can buy shares before the company hits its stride.

Of course, that’s the challenge: which growth stocks are worthy long-term investments, and which are likely to fizzle out? To help you start separating duds from dynamite companies, let’s break down growth stocks and help you find some of the most promising ones for Canadian investors.   

What Are Growth Stocks? 

Growth stocks are companies that are growing their revenues and earnings faster than most companies in their immediate industry or market sector. These companies typically gain immense momentum because they have an innovative idea, product, or service that no other business offers. 

In order to accelerate their expansion, growth stocks will often sacrifice profitability to grow as quickly as possible. That means they’ll reinvest profits in the business, rather than paying out dividends.

They’ll also have higher prices relative to the company’s earnings (or a high P/E ratio), which doesn’t typically scare investors, because they’re expecting higher earnings over the long run, regardless of what the company earns today. They may look expensive now, but 3, 5, even 10 years from now, today’s prices will look unbelievably low.

Volatility of Growth Stocks

Investing in growth stocks can feel exciting, often exhilarating, especially since most growth stock prices can be extremely volatile. When the company does better than expected, prices soar; when they disappoint, stock prices drop hard.

Likewise, during a bear market, growth stocks tend to take the hardest hit, as investors become increasingly uncertain about the company’s future. In contrast, growth stocks can soar during bull markets, when consumers have more disposable income and investors are willing to take risks.  

How Are Growth Stocks and Value Stocks Different? 

In a nutshell, value stocks are companies that are trading below the price most analysts believe the underlying company is worth. Essentially, they’re undervalued.

Many value stocks are actually battle-tested companies with a long history of performing well. Whether from a stock market downturn, or investors feeling less exuberant, the company’s shares have fallen, even though the business is still financially solid.

In short, they’re unadvertised bargains: you buy a share for a low price in the hopes that the company will rebound, rewarding you well. 

In contrast, growth stocks are typically new companies with a lot of upward potential. Unlike value stocks, many growth stocks are trading far above what’s expected of their industry. This is because investors believe the stock has future potential, and they’re betting that the company will achieve its promise and grow to a much larger size.

For this reason, growth stocks could be riskier for investors than value stocks, as it’s not always easy to decide which growth stocks will explode in value and which will falter.

What are some of the best Canadian growth stocks? 

You don’t need to look far to find exciting growth opportunities on the Canadian stock market. To give you an idea of what you should look for, here are six growth stocks you can find trading on the Toronto Stock Exchange.

Constellation Software

Constellation Software is a Canadian technology conglomerate that acquires, manages, and grows vertical market software businesses serving both public and private sectors. Its decentralized model allows acquired companies to operate independently while benefiting from shared resources and capital. The company has expanded its portfolio through numerous acquisitions, focusing on niche markets across various industries.

In 2024, Constellation Software reported total revenues of $10.07 billion, marking a 20% increase from the previous year. Net income attributable to common shareholders rose 29% to $731 million, or $34.48 per diluted share. The company completed acquisitions totaling $1.79 billion, contributing to its growth. Cash flows from operations reached $2.20 billion, up 23%, while free cash flow available to shareholders increased 27% to $1.47 billion. These results underscore Constellation Software’s continued success in its acquisition-driven growth strategy.

Waste Connections

Waste Connections is a North American waste management company offering non-hazardous waste collection, transfer, disposal, and recycling services in the U.S. and Canada. In 2024, the company completed 24 acquisitions, adding $750 million in annualized revenue and expanding its Canadian operations with 30 new facilities.

The company reported 2024 revenue of $8.92 billion, an 11.2% increase from the previous year. Net income declined 19% to $618 million. The growth was driven by price-led organic expansion and strategic acquisitions, while the income drop was attributed to one-time costs and operational challenges.

Looking ahead, Waste Connections projects 2025 revenue between $9.45 billion and $9.60 billion, with net income ranging from $1.186 billion to $1.224 billion. The company anticipates adjusted EBITDA margin expansion, supported by continued acquisition activity and operational improvements.

goeasy

goeasy Ltd. is a Canadian alternative financial services company offering non-prime leasing and lending through easyfinancial, easyhome, and LendCare. easyfinancial provides personal loans, easyhome offers lease-to-own financing for household goods, and LendCare focuses on point-of-sale financing in sectors like auto, home improvement, and healthcare. The company serves over 1.5 million Canadians, helping improve financial access for underserved consumers.

In 2024, goeasy reported a 22% revenue increase to $1.52 billion, with loan originations up 17% to $3.17 billion and its loan portfolio growing 26% to $4.6 billion. Adjusted net income reached $290 million, and earnings per share rose 18% to $16.71. goeasy also boosted its funding capacity to $1.9 billion and plans to launch a credit card and auto refinance product, targeting a loan portfolio of $7–8 billion by 2027.

Shopify

Shopify is a leading Canadian e-commerce platform that enables businesses of all sizes to build and manage online stores, with integrated tools for storefronts, payments, shipping, and fulfillment. The platform serves merchants across web, mobile, social media, and in-person channels, making it a comprehensive solution for modern retail. Its ease of use and scalability have made it especially popular among small and medium-sized businesses looking to grow their digital presence.

In 2024, Shopify reported strong financial performance, with annual revenue rising 26% to $8.88 billion and Gross Merchandise Volume (GMV) increasing 24% to $292.3 billion. The company posted $2 billion in net income and maintained an 18% free cash flow margin, highlighting improved operational efficiency. As Shopify expands its reach in international markets and enhances its offline capabilities, it remains a top growth stock in the global e-commerce sector.

WELL Health

WELL Health Technologies is a Canadian digital healthcare company operating medical clinics and offering telehealth and digital services in Canada and the U.S. As Canada’s largest owner of outpatient clinics, WELL provides virtual care, electronic medical records, and other digital tools. It continues to expand its integrated in-person and virtual care model.

In 2024, WELL reported record revenue of $919.7 million, up 19% year-over-year. The company delivered 5.7 million patient visits, a 32% increase, with 30% organic growth. Canadian Patient Services revenue rose 38.5% to $319.1 million, and U.S. revenue grew 11.6% to $532.2 million. Net income increased 75% to $29.1 million despite deferred revenue and cyberattack-related issues. Excluding these impacts, WELL was on track for $1.0 billion in revenue and $127 million in adjusted EBITDA.  

How to Choose Growth Stocks in Canada

Growth stocks aren’t always easy to spot. Sometimes they’re growing quietly behind the scenes, just one innovation away from taking off. Other times they’ve gained a large following, but they’re so new, it’s hard to determine if they have potential.

While it might be difficult to pick the next Shopify or Amazon, here’s a few things to look for. 

1. Pay attention to cultural trends

Growth stock companies often ride the waves of societal changes and megatrends. For instance, Amazon and Shopify wouldn’t have developed without a growing desire for better e-commerce experiences. And Netflix wouldn’t have gone anywhere if people hadn’t been frustrated with high cable prices and Blockbuster’s late fees. 

Some common trends you might want to look out for:

• Digital payments
• Green technology and renewable energy
• Cloud payments
• Cryptocurrency acceptance
• Streaming entertainment
• Remote work

If a new product or service has changed the way you traditionally do something—buying groceries, banking, or even communicating with colleagues in a work-from-home situation—the company behind them is worth looking into. 

2. Identify companies with strong competitive advantages

Companies that grow fast have products or services which few businesses can match. Some competitive advantages to look for:

• Network effects: The network effect happens when the value of a product or service improves as more and more people use it. Think of Slack. If two people in a company of 1,000 use Slack, its value diminishes. But if 898 people are using it, you better believe the remaining 102 won’t be far behind.

• High switching costs: Switching costs are what consumers pay—in dollars, time, and effort—to switch from one supplier to another. Take Shopify, for instance. Once a business starts using Shopify for its online operations, it becomes a major hassle to switch to one of Shopify’s competitors.

• Low-cost producers: Low-cost producers take items that consumers are unlikely to cut out—like bread or toothpaste—and produce them at a lower cost than similar companies. They might have a better way of making an item, or produce the item at such a large scale, they can afford to sell them at lower prices. Walmart and Aldi are good examples of low-cost producers.

3. Look for niche markets

The best growth stock companies emerge in uncharted markets where they have ample room to grow. Over time, these companies dominate their niche, until they merge into the broader market. 

If you notice a company that sells one product or service so well that they have a loyal ad growing customer base, take notice—you may have found your growth stock company. 

Should You Invest in Growth Stocks? 

Growth stocks are ideal for investors who have a long-term horizon and can stomach the volatility of these companies. Many growth stocks won’t hit their stride for 5, 10, or even 15 years or more.

If you’re okay waiting for a growth stock company to reach its full potential, and if you’re comfortable with growth stocks being sensitive to price swings, then growth stock investing might be right for you. 

On the other hand, if you’re near retirement, or you’re saving for a short-term goal, it’s probably not wise to buy shares in growth stocks. Though the returns can be immense, so can the losses. You might want to invest in something safer, such as blue chips, or companies with more stability.

For investors who don’t feel confident picking winners from emerging industries, you can always buy shares of growth-focused ETFs. One share of an exchange-traded fund will spread your money across numerous growth stock companies, which could help you balance the losses of one company with the gains of another.

Some common growth-focused ETFs in Canada include:

• BMO S&P/TSX Capped Composite Index ETF (TSX:ZCN)
• Vanguard Growth ETF Portfolio (TSX:VGRO)
• TD Global Technology Leaders Index ETF (TSX:TEC)