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Canadian Tech Analysts Share Their Top Picks for 2022

The year ahead could be a bumpy ride for tech, what with interest rates set to rise and growth stocks expected to take it on the chin, but there’s still money to be made in a stock picker’s environment. To that end, Cantech has compiled a number of analysts’ best ideas in the Canadian tech, life sciences and healthcare spaces, presented here in no particular order.

Last week, National Bank Financial released its report on the year ahead, saying that when it comes to technology, while the themes that dominated in 2021 will likely prevail in 2022, market sentiment has obviously shifted, as witnessed by declines across the sector in recent months. 

NBF analysts Richard Tse and John Shao said the broader trends towards digital transformation, AI, e-commerce and supply chain management are all expected to be key going forward and long-term investors focusing on market leaders in those fields will be rewarded. As for the shorter term, the recent pullback has made tech valuations seem much more reasonable, while stock selection will be the name of the game in 2022.

From that perspective, Tse likes Canadian IT Services giant CGI Group (CGI Group Stock Quote, Charts, News, Analysts, Financials TSX:GIB.A), saying the company is set to resume its previous growth trajectory with, among others, its metro-market acquisition growth strategy which will deploy $1 billion over the next 12 months to fuel its M&A.

“CGI’s operating prowess and focus on profitable growth is undervalued in a market that’s been drawn to high growth (valuation) names,” Tse wrote in National Bank’s January 9 report.

Tse has also nominated Kinaxis (Kinaxis Stock Quote, Charts, News, Analysts, Financials TSX:KXS), saying the supply chain management SaaS business has industry tailwinds at its disposal, making Kinaxis’ RapidResponse platform a high demand item.

“We continue to believe KXS’s valuation does not fully value a ‘normalized’ financial run rate looking ahead, particularly given that the total addressable market has expanded meaningfully from 3,000 to 7,000 customers,” Tse wrote.

John Shao has his eyes on Magnet Forensics (Magnet Forensics Stock Quote, Charts, News, Analysts, Financials TSX:MAGT), calling the digital investigation software company an early leader in its market with strong growth and profitability sightlines. 

“[Magnet Forensics’] combination of growth and profitability is coming from its unique advantages (an extensive artifact library, a complete digital forensic suite, a highly efficient sales model, etc.) in a market which has a very high entry barrier. Looking ahead, we’d expect that momentum to continue given the Company has already demonstrated its strong execution,” Shao wrote.

Despite the damage wrought by a short-seller report this past September, Tse says payments platform Nuvei (Nuvei Stock Quote, Charts, News, Analysts, Financials TSX:NVEI) is also worthy of Top Pick status. Tse believes the company is a disruptive player within a still-transforming payments market and that the name has the potential for outsized growth relative to the rest of the sector.

“Nuvei continues to expand in high growth verticals as demonstrated by its most recent acquisitions of Mazooma and Simplex, which have pushed the company further into both Crypto and the US gaming markets. Recent partnerships with brand names such as BetMGM (online gaming) & FTX (crypto exchange) highlight the Company’s intentions in those high growth segments,” Tse wrote.

Finally, Tse gave the nod to TELUS International (TELUS International Stock Quote, Charts, News, Analysts, Financials TSX:TIX), the Telus offshoot within the IT Services, content moderation and digital experience and data annotation space. Tse said TIX has the potential to further accelerate organic growth through acquisitions and that management has said breadth and velocity of M&A will pick up over 2022.

“With social content moving further into the crosshairs of regulation, we believe services such as content moderation continue to rise in their prominence. In 2019, Facebook spent ~$3.7 billion on content moderation employing tens of thousands of moderators. We think it’s reasonable for that spending to increase given the current backdrop – and with more social names in the market today, that aggregate market is likely even bigger. In our view, TELUS International’s AI solutions and moderators help those enterprises,” Tse wrote.

National Bank’s Top Picks

CGI Group

  • Rating: Outperform
  • Target Price: $135.00
  • Projected Return: 27 per cent


  • Rating: Outperform
  • Target Price: $225.00
  • Projected Return: 42 per cent

Magnet Forensics

  • Rating: Outperform
  • Target Price: $55.00
  • Projected Return: 91 per cent

Nuvei Corp

  • Rating: Outperform
  • Target Price: US$160.00
  • Projected Return: 152 per cent

TELUS International

  • Rating: Outperform
  • Target Price: US$50.00
  • Projected Return: 66 per cent

Haywood Capital Markets has delivered their 2022 top picks, with the list dominated by mining stocks but having three in the Tech/Special Situations category. Haywood said the potentially tough year ahead, fraught with continued COVID disruptions, rising commodity prices and higher interest rates, make it the investor’s job to lean more heavily on company fundamentals to find names that are best-positioned in their respective industries.

In the cannabis space, analyst Neal Gilmer singled out US multi-state operator Curaleaf (Curaleaf Stock Quote, Charts, News, Analysts, Financials CSE:CURA) for the wide scope of its operations (covering 23 states and including at last count 117 dispensaries) and healthy balance sheet with a recent US$475 million in debt financing to support its M&A program into 2022.

“We believe Curaleaf has demonstrated an ability to effectively grow both organically and through strategic acquisitions,” Gilmer wrote in Haywood’s January 12 report. “The strength of the management team and balance sheet accompanied by the size of operations should return meaningful growth and leverage without the need of further legislative reform. Future reform at either the federal or individual state levels should only accelerate Curaleaf’s growth trajectory.”

Gilmer also likes Canadian mobile game developer East Side Games Group (East Side Games Stock Quote, Charts, News, Analysts, Financials TSX:EAGR), who the analyst says should see a step-up in growth in 2022 driven by new titles and the benefit of its idle game development platform IdleKit. As well, Gilmer thinks East Side Games is a prime take-out target over the next couple of years as the company continues to mature and execute to strategy, noting that gaming heavyweight Take Two recently bought mobile game publisher Zynga for an implied valuation of US$12.7 billion.

“We believe East Side Games has demonstrated its ability to enter several proprietary IP agreements while at the same time entering partnerships that leverage its IdelKit platform to further diversify its revenue base,” Gilmer wrote. “With a proven game portfolio, new title launches, a SaaS revenue model and M&A pipeline the company is well positioned in 2022.”

Last, Haywood analyst Colin Healey likes Greenlane Renewables (Greenlane Renewables Stock Quote, Charts, News, Analysts, Financials TSX:GRN) in the cleantech space, saying the biogas upgrading tech company is his preferred way to gain leverage to the accelerating global investment in renewable natural gas infrastructure. Healey said 2022 should be another big growth year for Greenlane as the company continues to grow its international footprint and build out its sales pipeline.

“Greenlane offers the broadest range of technologies, providing a strategic advantage,” Healey wrote. “We see RNG as a critical component of the green energy revolution and continue to see governments worldwide prioritizing it.”

Haywood’s Top Picks


  • Rating: Buy
  • Target Price: $20.00
  • Projected Return: 90 per cent

East Side Games Group

  • Rating: Buy
  • Target Price: $6.50
  • Projected Return: 87 per cent

Greenlane Renewables

  • Rating: Buy
  • Target Price: $3.75
  • Projected Return: 200 per cent

The past couple of years have truly been a mixed bag for the healthcare space, with some companies benefitting from business related to helping populations survive and recover from the pandemic while others, especially in the health tech space, finding that the lockdowns and slowdowns made it more difficult to bring their products to market. 

Looking at healthcare, analyst Chelsea Stellick of iA Capital Markets saw prior momentum and positive sentiment wane through 2021 and while the rebound may be a ways off yet, Stellick is confident that investors with longer-term horizons can do well in the space.

“We believe integrated health tech players will shine in the years ahead as tight labour conditions increase an emphasis on employee retention,” Stellick said in a January 10 report. “However, we acknowledge that it may take until 2023 for market sentiment to completely recover from a painful 2021. We believe 2022 will present a unique opportunity for steadfast value investors to accumulate high-quality health technology ahead of the inevitable recovery in a rapid growth industry.” 

To that end, Stellick picked healthcare services company CareRx (CareRx Stock Quote, Charts, News, Analysts, Financials TSX:CRRX), which runs a network of specialty pharmacy fulfillment centres for seniors’ residences, and Quipt Home Medical (Quipt Home Medical Stock Quote, Charts, News, Analysts, Financials TSX:QIPT), which provides in-home monitoring and chronic disease management services. 

On CareRx, Stellick said the company’s recent M&A activity combined with debenture conversions this year will turn the company into “a cash flow machine” by the end of 2022, while macro tailwinds in the form of an ageing demographic will be a boost for the company.

“CareRx has a goal to reach $500 million in run-rate revenue (currently $370 million) and we conservatively estimate Adj. EBITDA margin to be 12 per cent-plus, which is achievable given the opportunities for growth in bed count that can be serviced with existing infrastructure,” Stellick wrote.

“CareRx also has a number of technology partnerships and a subsidiary that offers prescription delivery. This kind of ‘other bets’ portfolio benefits its brand value and provides moonshot opportunities to reinvest cash flow into,” she said.

As for Quipt Home Medical, Stellick said 2022 should be a year of rapid expansion involving further acquisitions and the further scaling up of operations across the United States where the company has dramatically grown its business to serving over 150,000 patients as of the end of 2021 including 62 locations across 15 states.

“We believe that recent tuck-in acquisitions and potential acquisitions currently under non-binding LOIs position QIPT well for 2022 and we anticipate more accretive acquisitions to be announced in 2022,” Stellick wrote.

“The regulatory environment is increasingly favourable; recent delays to Medicare cuts are representative of the Biden administration’s desire to maintain and improve healthcare coverage. QIPT trades at a significant discount to its peers (~9× versus ~14× F2022E EV/Adj. EBITDA), which we believe is unwarranted given management’s strong track record of successfully improving profitability,” she said.

iA Capital Markets’ Top Picks

CareRx Corp 

  • Rating: Buy 
  • Target Price: $9.50
  • Projected Return: 89.6 per cent

Quipt Home Medical

  • Rating: Buy
  • Target Price: $13.50
  • Projected Return: 81.0 per cent

Stick to the basics seems to be the theme this year and it’s one echoed by Laurentian Bank in its Preferred Picks 2022 report, delivered on January 5. Laurentian said macro uncertainties along with COVID are continuing factors as we begin the new year and thus its stock picks “focus on companies with sound business models, healthy balance sheets and cash flow generation, and positive organic growth.”

Laurentian analyst Nick Agostino has singled out enterprise resource planning (ERP) software company Sylogist (Sylogist Stock Quote, Charts, News, Analysts, Financials TSX:SYZ) in the Diversified Technology space, saying higher IT spend by companies as a result of supply chain issues and the pandemic should benefit SYZ. 

“While the supply chain challenges noted above may have tempered some growth, we believe that demand has not been lost but rather deferred and look to above normal IT growth rates to persist through 2022 and likely into 2023,” Agostino wrote. “The heightened IT (software) spending should also benefit our preferred pick, Sylogist.”

Finally, Laurentian analyst Nauman Satti likes aerospace name Héroux-Devtek (Héroux-Devtek Stock Quote, Charts, News, Analysts, Financials TSX:HRX) in the Diversified category, saying the company is showing stable revenue from its backlog despite industry challenges, is showing growth in its Defence segment, has a strong balance sheet with M&A upside and continues to grow its brand as witnessed by its new Lockheed Martin contract.

“The recent landing gear design contract with Lockheed Martin is reflective of HRX’s ability to undertake more sophisticated work, enhancing its brand and making it a more attractive acquirer,” Satti wrote.

Laurentian Bank Securities’ Preferred Picks 2022


  • Rating: Buy
  • Target Price: $16.00
  • Projected Return: 38 per cent


  • Rating: Buy
  • Target Price: $23.00
  • Projected Return: 36 per cent

Disclosure: East Side Games Group is an annual sponsor of Cantech Letter.

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About The Author /

Jayson is a writer, researcher and educator with a PhD in political philosophy from the University of Ottawa. His interests range from bioethics and innovations in the health sciences to governance, social justice and the history of ideas.
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