Docebo (TSX:DCBO): this analyst just raised his price target

Docebo’s (Docebo Stock Quote, Chart, News, Analysts, Financials TSX:DCBO) third-quarter revenue exceeded guidance as stronger enterprise customer demand helped offset delays in government contracts, leading ATB Cormark Capital Markets analyst Gavin Fairweather to raise his target to C$49.00 from $44.00.

Fairweather maintained his “Outperform” rating on the Toronto-based learning management software company in his Nov. 9 report, saying improving customer retention and growing demand for its artificial intelligence products could support further revenue growth.

“Docebo beat guidance and sales growth accelerated as churn headwinds begin to lap,” Fairweather said. “While Federal deals slipped into Q4, Enterprise traction continues to build, which combined with lower Dayforce churn led to an ARR beat.”

Docebo reported third-quarter revenue of US$70.3-million, up 14% year-over-year and above the upper end of management’s US$69.7-million guidance. Adjusted EBITDA reached US$16.7-million, exceeding guidance of US$15.9-million to US$16.1-million. Annual recurring revenue increased 11% to US$261.5-million, compared with Fairweather’s US$261-million estimate. Net new ARR bookings reached US$6.4-million, up 156% year-over-year

The company added larger enterprise customers, with the number generating more than US$100,000 in annual recurring revenue increasing 24% to 609

Average annual contract value also increased 24% to US$77,900.

“We are encouraged by Enterprise momentum,” Fairweather said.

The analyst noted that several major customer wins involved replacing competing learning management systems, including agreements with Honda Motor Europe, Medtech and TechnologyOne. Medtech consolidated eight learning systems onto Docebo’s platform, while TechnologyOne purchased Docebo’s learning management system alongside its 365Talents offering.

However, expected U.S. government contracts were delayed during the quarter because of procurement issues. Fairweather said management remains optimistic about closing those agreements in the fourth quarter, although some could slip into 2027.

“If certain Government deals close in Q4, ARR additions could be close to record levels as they stack on Enterprise seasonality,” he said.

Docebo is also expanding its AI offerings. Docebo Agents and Docebo Knowledge became generally available in late October, alongside the native integration of 365Talents. More than 600 customers participated in the Docebo Agents beta program, which Fairweather said could support additional sales to existing customers as companies adopt AI-powered learning tools.

Docebo also announced a US$60-million special dividend, equivalent to US$2.42 per share, following limited participation in its September substantial issuer bid. Fairweather said the dividend allows Docebo to return capital while maintaining sufficient liquidity for operations and growth.

Management expects fourth-quarter revenue of US$71.9-million to US$72.1-million and Adjusted EBITDA of US$16.9-million to US$17.1-million. Fairweather increased his fiscal 2026 revenue forecast to US$276.6-million from US$275.5-million and his Adjusted EBITDA estimate to US$55.9-million from US$55.7-million. For fiscal 2027, he raised his revenue forecast to US$305.1-million from US$302.4-million but lowered his Adjusted EBITDA estimate to US$65.5-million from US$66.1-million. He expects revenue to reach US$344-million and Adjusted EBITDA to improve to US$81-million in fiscal 2028.

He said stronger enterprise bookings, potential government contract wins and additional revenue from AI products could support the shares over the coming quarters.

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