Docebo Inc. (DCBO): A Bull Case Theory

We came across a bullish thesis on Docebo Inc. (DCBO) on Make Money, Make Time’s Substack by Oliver | MMMT Wealth. In this article, we will summarize the bulls’ thesis on DCBO. Docebo Inc. (DCBO)’s share was trading at $46.99 as of Dec 18^th. DCBO’s trailing and forward P/E were 82.47 and 37.45 respectively according to Yahoo Finance.

DCBO is a cloud-based learning management system designed to help organizations streamline corporate training programs. Leveraging an AI-powered platform, the company enables businesses to automate and optimize employee learning and development while ensuring compliance and tracking performance. The company has seen strong revenue growth, with a 19.20% increase, and boasts a healthy gross profit margin of 80.96%. DCBO’s valuation remains at an EV/Sales (NTM) ratio of 6.0x and EV/EBITDA (NTM) of 33.6x, indicating that the market is pricing in significant future growth. The company also generates a free cash flow (FCF) per share of $0.82.

DCBO’s investment thesis is centered around its strategy to acquire larger customers, evidenced by a 4x increase in average contract volume since 2017. This growth trajectory is further supported by the company’s efforts to obtain US Federal certification in 2025, which would allow it to provide cloud-based services to government agencies, ensuring compliance with standardized security, authorization, and monitoring protocols. While DCBO has a clear path for growth, particularly in expanding its client base and securing government contracts, the high valuation multiple may limit upside potential for more risk-averse investors.

Overall, while DCBO offers a strong runway for growth if it continues to secure larger clients and government certifications, it may not be the best fit for investors looking for more immediate opportunities. The company’s high valuation and the competitive nature of the corporate training space suggest that its upside may be more limited than other investment opportunities.

Docebo Inc. (DCBO) is not on our list of the 31 Most Popular Stocks Among Hedge Funds. As per our database, 15 hedge fund portfolios held DCBO at the end of the third quarter which was 17 in the previous quarter. While we acknowledge the risk and potential of DCBO as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than DCBO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.

Disclosure: None. This article was originally published at Insider Monkey.