When Will Docebo Inc. (TSE:DCBO) Become Profitable?

By
Simply Wall St
Published
May 07, 2021
TSX:DCBO
Source: Shutterstock

Docebo Inc. (TSE:DCBO) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Docebo Inc. provides a cloud-based learning management system to train internal and external workforces, partners, and customers in North America, Europe, and the Asia-Pacific region. On 31 December 2020, the CA$2.0b market-cap company posted a loss of US$7.7m for its most recent financial year. As path to profitability is the topic on Docebo's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

Check out our latest analysis for Docebo

According to the 10 industry analysts covering Docebo, the consensus is that breakeven is near. They expect the company to post a final loss in 2022, before turning a profit of US$9.2m in 2023. So, the company is predicted to breakeven approximately 2 years from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 59%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth
TSX:DCBO Earnings Per Share Growth May 8th 2021

Underlying developments driving Docebo's growth isn’t the focus of this broad overview, but, take into account that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 0.007% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Docebo, so if you are interested in understanding the company at a deeper level, take a look at Docebo's company page on Simply Wall St. We've also compiled a list of important aspects you should further examine:

  1. Valuation: What is Docebo worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Docebo is currently mispriced by the market.
  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Docebo’s board and the CEO’s background.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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Simply Wall St is focused on providing unbiased, high-quality research coverage on every listed company in the world. Our research team consists of data scientists and multiple equity analysts with over two decades worth of financial markets experience between them.