For greater than a yr after the pandemic hit and Air Canada (TSX:AC) inventory misplaced a tonne of its worth, it was one of many hottest shares Canadian traders wished to purchase in anticipation of its restoration and big progress potential.

Nevertheless, whereas the unfavourable impacts the pandemic had on Air Canada didn’t final all that lengthy, they have been so disastrous (initially impacting roughly 90% of its income) that the inventory needed to tackle a tonne of debt simply to remain afloat.

For the primary few years after the pandemic, I persistently warned traders {that a} restoration may take years to materialize. Nevertheless, now that Air Canada inventory has absolutely recovered and is rising once more, it appears as if many traders have forgotten its potential.

And whereas Air Canada may appear to be many to be a restoration inventory, and it definitely nonetheless has a tonne of potential to take action, it’s additionally persistently rising yr in and yr out.

Subsequently, in the event you’re searching for a high-potential progress inventory to purchase now, right here’s why Air Canada is a wonderful selection.

Trying ahead to not again

In 2023, Air Canada inventory lastly surpassed the income it generated in 2019, finishing its restoration and simply doing so with gross sales of $21.8 billion in comparison with $19.1 billion in 2019.

But, even with its operations now absolutely recovered and Air Canada inventory targeted on persevering with to develop its gross sales and enhance its profitability, impacts from the pandemic nonetheless linger.

There’s nonetheless a tonne of debt on its steadiness sheet, and with rates of interest nonetheless at elevated ranges, the inventory’s curiosity expense is far larger (virtually double) than what it was in 2019.

Nevertheless, whereas there are nonetheless indicators of the numerous affect the pandemic had on Air Canada, the inventory is wanting ahead, not again, and is exhibiting why it’s a progress inventory to purchase now.

After three straight years of seeing a restoration in income, Air Canada is now working to develop and broaden its operations, with analysts anticipating a greater than 5% improve in gross sales every of the subsequent three years.

Extra importantly, although, analysts estimate that Air Canada will stay worthwhile going ahead. For instance, in 2024, Air Canada is predicted to generate normalized earnings per share of $3.74. And in 2025, that’s anticipated to leap one other 14% to $4.26 as Air Canada’s margins enhance.

So, with Air Canada inventory now absolutely recovered and with a big runway of progress forward of it, there’s no query it’s one of many prime progress shares to purchase now.

Air Canada’s progress potential and ultra-cheap valuation make it one of many prime shares to purchase

When you think about that Air Canada nonetheless trades under $20 a share and has really misplaced worth during the last yr regardless of its spectacular restoration, it’s clear how low-cost the inventory is at this time.

At simply over $18 on the time of writing, Air Canada is buying and selling at simply 4.9 occasions its anticipated earnings in 2024 and simply 4.3 occasions its anticipated earnings in 2025.

Moreover, with Air Canada anticipated to generate earnings earlier than curiosity, taxes, depreciation and amortization (EBITDA) of greater than $3.8 billion this yr, its ahead enterprise worth (EV) to EBITDA ratio is simply 3.1 occasions.

For reference, within the three years main as much as the pandemic, Air Canada averaged a ahead price-to-earnings ratio of seven.8 occasions, a lot larger than the 4.9 occasions it trades at at this time.

Subsequently, whereas this high-potential, long-term progress inventory trades so cheaply, it’s undoubtedly probably the greatest investments to purchase now.