Some development shares solely want a spark. But as we speak, we’re two names that have already got a fuse burning. Canadian traders looking for upside over the following yr could need to look previous the standard mega-cap names. Smaller development shares can transfer sooner when earnings momentum, new contracts, and investor consideration all line up.
In addition they carry extra danger, in fact. A single weak quarter can hit onerous. But Kraken Robotics (TSXV:PNG) and Propel Holdings (TSX:PRL) each carry the form of well timed development story that may draw recent curiosity if execution stays on monitor.
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Defence spending, subsea safety, offshore vitality, and unmanned techniques all sit close to the centre of world demand. Kraken inventory builds sonar, subsea batteries, imaging techniques, and robotic expertise for navy and business clients. That provides it a uncommon mixture of defence publicity with a Canadian tech-growth angle.
The numbers make the story onerous to disregard. Kraken inventory reported 2025 income of $102.2 million, up 12% from 2024. Extra importantly, administration expects 2026 income between $165 million and $175 million, with adjusted earnings earlier than curiosity, taxes, depreciation, and amortization (EBITDA) between $40 million and $50 million, excluding any contribution from its deliberate Covelya acquisition. Proper now, that factors to greater than 65% income development.
That’s the “skyrocket” case. But Kraken inventory additionally introduced $87 million of product orders to date in 2026, together with defence and SeaPower battery orders. Its new Nova Scotia battery facility ought to assist it meet rising demand. In the meantime, Covelya might develop its attain in world maritime robotics as soon as the deal closes.
Nonetheless, this isn’t a sleepy blue chip. Kraken inventory trades on large expectations after an enormous multi-year run. Income can swing from quarter to quarter as a result of massive orders don’t all the time land neatly. Traders additionally want to look at integration danger if the Covelya deal closes. Even so, Kraken inventory provides traders direct publicity to a market the place governments and business clients hold spending.
PRL
Propel Holdings affords a really totally different development setup. As a substitute of robotics, it makes use of expertise and synthetic intelligence (AI) to supply credit score merchandise to shoppers, primarily by digital platforms and financial institution partnerships. That makes it a fintech inventory, however one with income, dividends, and an actual working monitor report.
Customers nonetheless want credit score, even in a slower financial system. Banks usually pull again from riskier debtors when circumstances tighten. Propel steps into that hole with data-driven underwriting and merchandise aimed toward underserved clients. This will create sturdy development, offered credit score high quality holds up.
Its newest quarter confirmed the machine nonetheless works. Income hit a report US$166.1 million within the first quarter of 2026, up from US$138.9 million a yr earlier. Originations funded rose 30% to US$199 million. Adjusted EBITDA reached US$42 million, whereas loans and advances receivable climbed to a report US$466.4 million. Propel additionally raised its dividend once more, with the quarterly payout shifting to $0.24 per share, yielding 4.1%!
The inventory provides one other twist. At round $21, Propel trades effectively under its 52-week excessive of $39. That doesn’t assure a rebound, however it does imply traders should buy a fast-growing fintech at a a lot cooler value than the market as soon as demanded. If earnings development re-accelerates by 2026, the valuation might look extra engaging rapidly, particularly if traders begin rewarding worthwhile development once more.
The danger sits within the enterprise mannequin. Lending firms can endure when unemployment rises or debtors fall behind. Propel’s internet revenue additionally slipped yr over yr within the newest quarter, at the same time as income grew. Traders ought to due to this fact watch credit score losses, funding prices, and regulatory adjustments.
Backside line
Collectively, Kraken inventory and Propel supply two daring however very totally different development tales. Kraken rides defence and subsea robotics. Propel rides fintech, lending demand, and AI-driven underwriting. Neither inventory fits cautious traders who hate volatility, however for these prepared to simply accept danger, each might have room to run over the following 12 months — particularly if the market retains chasing worthwhile Canadian development with seen earnings momentum constructing.
