Hi there,
I am a fan of Docebo and it is a company we've had our eye on for a while. The company has benefited from the pandemic much like many other high-growth SaaS (software as a service) companies. Between 2017 and 2019, the company grew revenue by an average of 47% annually. IN 2020, it is growing revenue at a 50% clip. It is also worth noting that 92% are recurring revenues.
When looking at high-growth stocks, sustainable and consistent revenue growth is a key metric. DCBO is not a flash in the pan and has a proven track record.
In the last quarter it added notable clients including LEGO, TD Ameritrade and BPER Banca - a testament to the strength of the company's platform. It also counts Bloomberg, Walmart and Heineken among high-profile customers. In total, it has more than 2,000 customers and grew its base by 24% last quarter. The LMS industry is ripe for disruption and Docebo's platform is consistently ranked among the industry's best.
In terms of valuation, the company isn't cheap but it isn't expensive either. Since the company is not yet profitable, it is best to look at value against revenue. It is trading at 27 times sales, and 16 times forward sales. Although this may seem expensive, it is actually just slightly above the Canadian SaaS average. In the U.S. SaaS companies can command 40 times sales.
In my opinion, the recent downturn is a buying opportunity. I think the price jump to $60 post earnings was over done, but it is now worth a look. Of note, I've picked up shares and regardless of the short term fluctuations am confident that I will be rewarded over the next 3 to 5 years.
Mat