When evaluating soaring stocks that could continue climbing, it's important to take a comprehensive view. This includes examining recent performance, market conditions, and the company's future potential. TSX stocks that surge often do so for good reasons, such as strong earnings, expanding market share, or alignment with prevailing trends. So, let's take a look, diving into some examples.

Into earnings

To assess sustainability, investors should start with recent earnings. For example, Loblaw Companies (TSX:L) reported adjusted earnings of $2.50 per share in the third quarter (Q3) of 2024, a 10.6% increase year over year, highlighting its ability to perform in a competitive retail market. Similarly, Canadian Imperial Bank of Commerce (TSX:CM) achieved adjusted net income of $1.89 billion in its most recent quarter, with a 25.6% growth in quarterly earnings year over year. WSP Global (TSX:WSP), an engineering services leader, reported a 10.7% revenue increase in its latest quarter, reflecting robust demand for its infrastructure expertise.

Past performance is another critical factor when determining whether a stock's rise has staying power. Consistency in growth often signals a company's ability to navigate challenges effectively. Loblaw, for instance, has shown steady revenue growth, leveraging its dominance in the grocery and pharmacy sectors while capturing cost-conscious consumers through its No Frills and Maxi banners. CIBC has a reputation for resilience, benefiting from diversified revenue streams that have allowed it to weather financial headwinds better than some of its peers. Meanwhile, WSP's strategic focus on acquiring complementary businesses has helped it build a globally diversified portfolio, ensuring steady growth over time.

Looking ahead

Future growth potential is what ultimately propels stocks higher over the long term. Loblaw Companies Limited stands out as a leader in retail innovation and execution. Its Q3 2024 results, with revenue of $18.54 billion, a 1.5% year-over-year increase, underline its strong market position. The TSX stock's focus on discount shopping and expanding pharmacy services demonstrates its ability to adapt to consumer needs. This adaptability has allowed Loblaw to achieve a 49.3% rise in its stock price over the past year, and its strategies suggest further room to grow.

Canadian Imperial Bank of Commerce offers a mix of stability and growth potential. Its strong Q4 2024 earnings underscore the TSX stock's prudent management and ability to reduce credit loss provisions, a critical factor in its performance. With an attractive dividend yield and consistent history of payouts, CIBC appeals to income-oriented investors while also providing exposure to the financial sector's recovery as economic conditions stabilize.

WSP Global presents an exciting growth story driven by its focus on infrastructure and sustainability. Its recent 10.7% revenue growth is a testament to its successful strategy of securing high-profile projects and expanding into lucrative markets. The TSX stock's alignment with global trends in green energy and urbanization positions it as a key player in shaping the future of cities. With governments increasingly prioritizing infrastructure investments, WSP is set to benefit from a sustained influx of opportunities.

Bottom line

Valuation metrics provide insight into whether a stock remains attractive despite recent gains. Loblaw's forward price-to-earnings (P/E) ratio of 19.68 indicates it is reasonably valued, given its growth potential and market position. CIBC, with a forward P/E of 11.60, offers a compelling case for value investors, especially given its dividend yield of 4.02%. WSP's forward P/E of 26.53 reflects its growth trajectory, supported by strong earnings growth and consistent project wins. These metrics suggest that all three stocks, while soaring, have not reached levels that would deter further investment.

Loblaw, CIBC, and WSP demonstrate the characteristics of soaring stocks with further potential. Strong earnings, consistent performance, and alignment with market trends make them attractive for investors seeking stability and growth. By evaluating these factors carefully, you can position your portfolio to benefit from their upward momentum while keeping an eye on the broader market context.