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Docebo has an 82 per cent upside, says ATB

ATB Capital Markets analyst Martin Toner continues to remain upbeat about online learning platform Docebo (Docebo Stock Quote, Charts, News, Analysts, Financials TSX:DCBO) after the company’s latest quarterly release. In a Thursday report to clients, Toner reiterated an “Outperform” rating and one-year target of $90.00, good for a projected return at press time of 82 per cent.

Docebo reported its first quarter 2023 financials before market open on Thursday, coming in with revenue up 29 per cent to $41.5 million and gross profit of $33.4 million, up 31 per cent from a year ago. Adjusted EBITDA was $2.2 million compared to negative $1.3 million a year earlier.

“Docebo is committed to continuous innovation and our customers are seeing the benefits of our solutions in supporting their revenue operations and driving operational efficiency. We are pleased to report strong revenue growth and improved profitability in Q1,” said Claudio Erba, Founder and Chief Executive Officer, in a statement. 

“While the macro environment may present challenges throughout the year, we are confident in our ability to capitalize on opportunities that provide sustainable, balanced growth over the long-term,” he said.


Toner said the $41.5 million topline was in-line with the consensus call at $41.4 million and a bit above his estimate at $40.9 million, while adjusted EBITDA at $2.2 million was a beat of both the Street at $1.9 million and ATB at $1.3 million.

Despite the good-looking results, the stock fell sharply in trading. In his comments, Toner noted management’s guidance miss, saying Q2 2023 revenue guidance was $42.9-$43.2 million, which was below the consensus expectation of $4.3 million. Toner said management’s Adjusted EBITDA margin guidance of 5.5-6.5 per cent implied adjusted EBITDA of $2.4-$2.8 million, which was in-line with consensus.

“Guidance implies further annual recurring revenue (ARR) growth deceleration. We estimate that ARR growth will bottom at ~25 per cent in the coming quarters,” Toner wrote.

“While Docebo continues to perform well controlling costs, improving margins, and beating our expectations, revenue growth continues to decelerate. Despite cost control, Docebo continues to invest in growth, and we would expect those investments to bear fruit as the macroeconomic environment improves,” he said.

Docebo shares reached a high of about $110 in early 2021 before heading south and landing around the $40-$50 range where they’ve mostly traded over the past year.

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