Canadians trying to put money into high quality development shares ought to contemplate including Docebo (TSX:DCBO) to their portfolio. Valued at a market cap of $840 million, this small-cap TSX inventory is down 75% from all-time highs, permitting you to purchase the dip.
Docebo offers a cloud-based studying administration platform that helps organizations ship, handle, and monetize coaching applications. The platform contains core options like personalised course supply, off-the-shelf content material libraries, superior analytics and reporting instruments, and AI-powered content material creation.
Docebo affords modules for constructing learner communities, promoting coaching content material via e-commerce, and creating customized studying experiences outdoors the normal platform setting.
The corporate additionally offers specialised integrations with Salesforce and Microsoft Groups, cell app publishing capabilities, and options for coaching exterior audiences, reminiscent of clients and companions.
The bull case for this TSX tech inventory
Docebo delivered third-quarter outcomes that confirmed the underlying power of its core studying administration platform enterprise, although headline numbers masked strong execution beneath the floor.
The corporate added US$2.5 million in sequential annual recurring income (ARR). Nevertheless, excluding the affect of the wind-down of its Dayforce partnership, ARR rose 14% yr over yr.
Notably, Docebo reported an EBITDA (earnings earlier than curiosity, tax, depreciation, and amortization) of 20%, which signifies an enchancment in operational leverage.
On the Dayforce entrance, administration offered particular steering on how that partnership will section out. The connection at the moment represents 6.2% of ARR and is anticipated to say no to roughly 3.5% to 4.5% of whole income in 2026, then drop to 1% to 2% in 2027 earlier than it turns immaterial. The accelerated wind-down occurred sooner than anticipated, however hasn’t derailed general momentum.
Docebo made notable progress within the authorities sector following its FedRAMP certification in Could. The corporate has already secured two new federal clients, together with an enlargement with the Division of Vitality and a take care of the Air Power Cyber Academy via its accomplice, Deloitte.
Administration had initially anticipated federal wins to materialize within the second half of fiscal 2026, making these early victories significantly spectacular. The FedRAMP certification can be serving to Docebo win extra enterprise in state and native authorities markets, the place comparable safety necessities are more and more in place.
Docebo continues to advance its AI technique with merchandise like Concord Search, which has already powered half one million queries since launch.
Docebo launched an AI credit-based consumption mannequin for modules like AI Digital Coach and AI Video Presenter, aiming to monetize AI capabilities extra straight going ahead.
Enterprise wins included notable clients reminiscent of Veolia, a French multinational with over 200,000 workers, and a 3rd division at Amazon, regardless of the pending termination of the AWS Talent Builder contract.
Is that this TSX inventory undervalued?
Docebo has underperformed the broader market by a large margin as a result of slowing development. The e-learning platform elevated income from US$41.44 million in 2019 to US$217 million in 2024, indicating an annual development charge of virtually 40%. Comparatively, its top-line is forecast to develop by “simply” 9.3% yearly between 2025 and 2029, given consensus value targets.
Whereas Docebo’s top-line development is decelerating, its revenue margins are forecast to broaden steadily. Wall Road estimated adjusted earnings per share to broaden from $1.28 per share in 2025 to $2.87 per share in 2029. If the TSX tech inventory is priced at 15 instances ahead earnings, which is sort of low cost, it ought to achieve 50% inside the subsequent three years.
