In This Article:
Docebo Inc. (TSE:DCBO), is not the largest company out there, but it saw a significant share price rise of 33% in the past couple of months on the TSX. While good news for shareholders, the company has traded much higher in the past year. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Today we will analyse the most recent data on Docebo’s outlook and valuation to see if the opportunity still exists.
Check out our latest analysis for Docebo
What's The Opportunity In Docebo?
According to our valuation model, Docebo seems to be fairly priced at around 8.9% below our intrinsic value, which means if you buy Docebo today, you’d be paying a reasonable price for it. And if you believe the company’s true value is CA$73.16, then there’s not much of an upside to gain from mispricing. So, is there another chance to buy low in the future? Given that Docebo’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.
What kind of growth will Docebo generate?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Docebo's earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.
What This Means For You
Are you a shareholder? DCBO’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping an eye on DCBO, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.