Catalysts
- 94% of revenue comes from subscriptions, which is Docebo's core business.
- The e-learning services industry expects an annual growth of approximately 19% until 2030, which could provide strong tailwind.
Risks
- Growth could be significantly lower than expected if the industry becomes oversaturated.
- Docebo is extremely dependent on the US market and could come under pressure in the event of economic or political instability.
- Regulatory freedom in Canada could lead to share dilution in worst case situations.
- Docebo works heavily with AI and could be hit hard if AI growth flattens or a stock market correction occurs.
Valuation
- By calculating a neutral 2-stage DCF model, we arrived at a value of approximately US$930m, although we can expect a higher value with a positive growth trend or continued industry growth until 2035.
- Until 2028 revenue should grow to about US$433m and earnings of around US$70m.
- compared to competitors the average foward P/E would be about 29.73.
- The current margin of safety is approximately 25%
Assumptions
- We expect Docebo to grow with an average of 24.8% per Year .
- Docebo's profit margin is expected to grow to around 16.4%.
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Disclaimer
The user IndusyHoldings holds no position in TSX:DCBO. Simply Wall St has no position in any of the companies mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The author of this narrative is not affiliated with, nor authorised by Simply Wall St as a sub-authorised representative. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimates are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.
