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Two tech stocks with Outperform ratings from ATB

ATB Capital Markets analyst Martin Toner is staying bullish on two Canadian tech stocks, giving the nod to both Docebo (Docebo Stock Quote, Charts, News, Analysts, Financials TSX:DCBO) and Lightspeed Commerce (Lightspeed Commerce Stock Quote, Charts, News, Analysts, Financials TSX:LSPD) in a new report. 

Q1 is done for 2023 and it’s been a good one for technology stocks. The tech-heavy Nasdaq Composite was up 17.7 per cent over the quarter and up 3.0 per cent over the last week alone. In his weekly Growth and Innovation (G&I) report delivered on Sunday, Toner said it’s a case of so far so good in 2023, as five of the ten G&I stocks under ATB’s coverage were up double digits for the first quarter.

Up almost 22 per cent over the Q1 was Docebo, which has been proving the use case for its learning management system and showing how profitability is becoming a reality, according to Toner.

Last week, Toner met virtually with members of Docebo’s management team and came away from the meetings touting DCBO’s growth prospects.


“Turning profitable in Q3/22 ahead of investor expectations, management has noted their expectation of exiting FY2023 with low-double-digit adjusted EBITDA margin. The external use case, enterprise customers, and growth with existing customers are all growth drivers for Docebo. As most of the Company’s ARR is under three-year contracts, the sticky revenue suggests Docebo would be resilient in a potential recession,” Toner wrote.

As for payments and e-commerce company Lightspeed, Toner met with its Head of Investor Relations, Gus Papageorgiou, last week and said Lightspeed is expecting only modest growth up ahead regarding its customer base while at the same time projecting 20 per cent EBITDA margins with its current customers.

“The Company continues to expect to becomes profitable in FY2024, which starts this month. Lightspeed plans to be more aggressive with incentives for existing customers to switch payments providers, and may introduce a gateway fee for merchants who decline to use its payments,” Toner said.

Like Docebo, Lightspeed’s share price got taken to the woodshed over the back end of 2021 and through 2022, but LSPD has had more trouble than DCBO in gaining traction over the past six months. Year-to-date, the stock is up five per cent.

With the update, Toner reiterated “Outperform” ratings on Docebo and Lightspeed. His maintained 12-month target price on Docebo is $90.00 per share, representing at press time a projected return of 63.6 per cent. Toner’s maintained target on Lightspeed is $55.00 per share, representing a projected return of 167.6 per cent.

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About The Author /

Jayson is a writer, researcher and educator with a PhD in political philosophy from the University of Ottawa. His interests range from bioethics and innovations in the health sciences to governance, social justice and the history of ideas.
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