Docebo: Still Overvalued Even After Recent Drop

Eric Brierley
58 Followers
(12min)

Summary

  • Docebo's revenue growth is slowing, with 2025 guidance revised down to 9–10%, reflecting increased competition and macroeconomic headwinds.
  • Despite achieving profitability, Docebo's premium valuation (P/S 3.6x) is not justified given the industry maturity and loss of key customers like Amazon AWS.
  • The eLearning market is crowded, with established players and new entrants threatening Docebo's ability to move upmarket and retain large clients.
  • My DCF analysis values Docebo at $18.43 USD, well below the current price, leading me to rate DCBO stock a sell due to unattractive risk-reward.

Close-up of woman professional with infographic report on digital tablet in office

Luis Alvarez

The Setup

Docebo Inc. (NASDAQ:DCBO) has been one of the more resilient Canadian SaaS companies since the speculative highs of 2021 have faded. Although the stock is already down ~44% YTD and currently trades at $27 CAD/share, which is a far

This article was written by

58 Followers
Contrarian investor with a focus on value and deep value. Sectors of interest include financial services (regional banks and insurance), retail, software/technology, and waste management stocks. My personal investing style involves taking a concentrated portfolio approach in a few key companies that I have obtained a deep understanding of through thorough research of the industry, trends, competitors, key success drivers, key risks, and management. I also place a large emphasis on valuation as I believe every smart investment involves a deep understanding of the qualitative aspects of the company (i.e., the "story") and tying that story into a valuation that supports it. I believe investing is more so about understanding what you don't know as opposed to what you do know and appropriately managing risk so as to avoid mistakes that lead to permanent losses of capital.Educational background is in Business with an Accounting specialization and a minor in Economics from Wilfrid Laurier University in Waterloo, Ontario. I am currently working towards obtaining my CPA designation. I currently work at a large Financial Services company in Toronto, Canada in a non-investment risk-related role. My goal in writing on Seeking Alpha is to obtain second opinions on my ideas, and hopefully inspire other readers to think differently about their investing. Additionally, I enjoy studying previous examples of successful and unsuccessful deep value investments and understanding what does and does not work. I also don't mind investing in growth stories and look for good deals wherever they may lie.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

About DCBO Stock

SymbolLast Price% Chg
Market Cap
PE
Yield
Rev Growth (YoY)
Short Interest
Prev. Close
Compare to Peers

More on DCBO

Related Stocks

SymbolLast Price% Chg
DCBO
--
DCBO:CA
--