{"id":39945,"date":"2023-07-24T18:02:27","date_gmt":"2023-07-24T22:02:27","guid":{"rendered":"https:\/\/ifintechworld.com\/news\/slowing-enterprise-buying-environment-should-weigh-on-docebo-in-2023-nasdaqdcbo\/"},"modified":"2023-07-24T18:02:30","modified_gmt":"2023-07-24T22:02:30","slug":"slowing-enterprise-buying-environment-should-weigh-on-docebo-in-2023-nasdaqdcbo","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=39945","title":{"rendered":"Slowing Enterprise Buying Environment Should Weigh On Docebo In 2023 (NASDAQ:DCBO)"},"content":{"rendered":"<div data-test-id=\"content-container\">\n<p><figure class=\"getty-figure\" data-type=\"getty-image\"><picture>  <\/picture><figcaption> <\/figcaption><\/figure>\n<\/p>\n<h2>A Quick Take On Docebo<\/h2>\n<p><strong>Docebo Inc.<\/strong> (<span class=\"ticker-hover-wrapper\">NASDAQ:DCBO<\/span>) provides a suite of online learning capabilities with AI-enhanced functions to improve learning results for organizations of all sizes.<\/p>\n<p>I previously wrote about Docebo with a Buy outlook.<\/p>\n<p class=\"paywall-full-content invisible\">Management is seeing slow decision-making and longer sales cycles from large enterprise clients.<\/p>\n<p class=\"paywall-full-content invisible\">Assuming a slowdown in Docebo Inc.\u2019s revenue growth rate in 2023 versus 2022\u2019s growth rate, which is currently consistent with other SaaS companies, I\u2019m Neutral [Hold] on DCBO in the near term.<\/p>\n<h2 class=\"paywall-full-content invisible\">Docebo Overview<\/h2>\n<p class=\"paywall-full-content invisible\">Toronto, Canada-based Docebo was founded in 2005 to develop an integrated learning management system [LMS] for organizations of all sizes to provide internal and external training capabilities.<\/p>\n<p class=\"paywall-full-content invisible\">The firm is headed by founder and Chief Executive Officer Claudio Erba, who was previously project leader at MHP Srl and product manager at Selpress.<\/p>\n<p class=\"paywall-full-content invisible\">The<span class=\"paywall-full-content no-summary-bullets invisible\"> company\u2019s primary offerings include:<\/span><\/p>\n<ul class=\"paywall-full-content invisible no-summary-bullets\">\n<li>\n<p>Learn LMS<\/p>\n<\/li>\n<li>\n<p>Impact Measurement<\/p>\n<\/li>\n<li>\n<p>Analytics<\/p>\n<\/li>\n<li>\n<p>Shape<\/p>\n<\/li>\n<li>\n<p>Content<\/p>\n<\/li>\n<li>\n<p>Flow<\/p>\n<\/li>\n<\/ul>\n<p class=\"paywall-full-content invisible no-summary-bullets\">The firm acquires customers through its direct sales and marketing efforts, both through inbound and outside sales teams.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Docebo\u2019s average contract value was approximately $47,000 as of March 31, 2023.<\/p>\n<h2 class=\"paywall-full-content invisible no-summary-bullets\">Docebo\u2019s Market &amp; Competition<\/h2>\n<p class=\"paywall-full-content invisible no-summary-bullets\">According to a 2020 market research report by Global Market Insights, the global market for e-learning services is expected to reach $375 billion in value by the end of 2026.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">This represents a forecast CAGR of 8.0% from 2020 to 2026<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">The main drivers for this expected growth are continued technological innovation and growing Internet usage worldwide.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Also, the COVID-19 pandemic has acted as a forcing function for many users to pursue their education in an online environment, likely increasing the industry&#8217;s growth prospects in the years ahead.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Below is a chart showing the expected growth in the market by technology:<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">\n<figure class=\"regular-img-figure paywall-full-content invisible\" contenteditable=\"false\"><picture> <img decoding=\"async\" src=\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/07\/saupload_9CgzRvbIF3QqSAgcK2koB0-n4akIIsBs0-IzxqcvJwdk3pDY6G5O74_iU1h5R5yETvtVdZQC6BIr5VHncOoyeZOfuHisLncow3w3j7Zt2FN1mrzYtozwuaN7kBOg9bNKaSSTYcF-nPx93x90fc8-2cM.jpeg\" alt=\"Global E-Learning Market\" contenteditable=\"false\" loading=\"lazy\"> <\/picture><figcaption>\n<p class=\"item-caption\">Global E-Learning Market <span>(Global Market Insights)<\/span><\/p>\n<\/figcaption><\/figure>\n<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Major competitive or other industry participants include:<\/p>\n<ul class=\"paywall-full-content invisible no-summary-bullets\">\n<li>\n<p>Absorb LMS<\/p>\n<\/li>\n<li>\n<p>SAP SuccessFactors Learning<\/p>\n<\/li>\n<li>\n<p>Saba Cloud<\/p>\n<\/li>\n<li>\n<p>Tovuti LMS<\/p>\n<\/li>\n<li>\n<p>Cornerstone Learning<\/p>\n<\/li>\n<li>\n<p>Captivate Prime<\/p>\n<\/li>\n<li>\n<p>360Learning<\/p>\n<\/li>\n<li>\n<p>SumTotal Learning<\/p>\n<\/li>\n<li>Instructure<\/li>\n<\/ul>\n<h2 class=\"paywall-full-content invisible no-summary-bullets\">Docebo\u2019s Recent Financial Trends<\/h2>\n<ul class=\"paywall-full-content invisible no-summary-bullets\">\n<li>\n<p>Total revenue by quarter has continued to rise; Operating income by quarter has improved in recent quarters.<\/p>\n<\/li>\n<\/ul>\n<p class=\"paywall-full-content invisible no-summary-bullets\">\n<figure class=\"regular-img-figure paywall-full-content invisible\" contenteditable=\"false\"><picture> <img decoding=\"async\" src=\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/07\/saupload_Es6HlGQVpt24D0XN5LK-2pR1QQK6CSrV7nGKk1DiK4gVEOv8ElZdWGzVDVTW_otGLAd3r6edd9KpphDakWEyLTLVLkdvQHHtYDypvX1GDZ4FEZj04lvZtUMnp1ewWTi3EygBVF31Pv-A5ns5oAMlTlc.png\" alt=\"Total Revenue and Operating Income\" contenteditable=\"false\" loading=\"lazy\"> <\/picture><figcaption>\n<p class=\"item-caption\">Total Revenue and Operating Income <span>(Seeking Alpha)<\/span><\/p>\n<\/figcaption><\/figure>\n<\/p>\n<ul class=\"paywall-full-content invisible no-summary-bullets\">\n<li>\n<p>Gross profit margin by quarter has remained flat; Selling, G&amp;A expenses as a percentage of total revenue by quarter have dropped in recent reporting periods.<\/p>\n<\/li>\n<\/ul>\n<p class=\"paywall-full-content invisible no-summary-bullets\">\n<figure class=\"regular-img-figure paywall-full-content invisible\" contenteditable=\"false\"><picture> <img decoding=\"async\" src=\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/07\/saupload_McCkPJHSdf9nba7ei2PciglJ6RHKbk3p9D18hH8c-i2CmqL6I9z9lXt3GqWz58TC2SbebCtS1Gbx2XMny_u2Q_hGxrEYs1vk-V8ZwueVXxlBf0N82oZbIxtFdDbSleXZjOzg-EHJM6o4S65cRBfh0ts.png\" alt=\"Gross Profit Margin and Selling, S&amp;A % Of Revenue\" contenteditable=\"false\" loading=\"lazy\"> <\/picture><figcaption>\n<p class=\"item-caption\">Gross Profit Margin and Selling, S&amp;A % Of Revenue <span>(Seeking Alpha)<\/span><\/p>\n<\/figcaption><\/figure>\n<\/p>\n<ul class=\"paywall-full-content invisible no-summary-bullets\">\n<li>\n<p>Earnings per share (Diluted) have remained positive in recent quarters.<\/p>\n<\/li>\n<\/ul>\n<p class=\"paywall-full-content invisible no-summary-bullets\">\n<figure class=\"regular-img-figure paywall-full-content invisible\" contenteditable=\"false\"><picture> <img decoding=\"async\" src=\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/07\/saupload_leWEYlTh7qdlrIadbdp8UrillEavGR2aRFvKtPf37m-g7CRbggzxivyFIF1kVYQa1Q10VRldkQYDF5DcZgBHfJXMiSGrpszqN2m5Ga9rdwB8T1Hy3IQ6A700KuIGrojF_KUxKjPCn-lsvfTG01dq_k8.png\" alt=\"Earnings Per Share\" contenteditable=\"false\" loading=\"lazy\"> <\/picture><figcaption>\n<p class=\"item-caption\">Earnings Per Share <span>(Seeking Alpha)<\/span><\/p>\n<\/figcaption><\/figure>\n<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">(All data in the above charts is GAAP.)<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">In the past 12 months, DCBO\u2019s stock price has risen 28.75% vs. that of Instructure Holdings, Inc.\u2019s (INST) rise of 10.51%, as the chart indicates below.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">\n<figure class=\"regular-img-figure paywall-full-content invisible\" contenteditable=\"false\"><picture> <img decoding=\"async\" src=\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/07\/saupload_P3NeUgc3eb0PeDat0_JVBStitZX_vA0luojC9N8WjxH5CIuuhWFPUD9bz4Sn2CJIRJ_Y6pm1a4flWWLVWEzUgJmqRp3n99okP12mkqNyNxTUyk25hDHCaC0X_9NAF9__jJlxnaTXaLH9gusac4kbOj4_thumb1.png\" alt=\"52-Week Stock Price Comparison\" contenteditable=\"false\" loading=\"lazy\"> <\/picture><figcaption>\n<p class=\"item-caption\">52-Week Stock Price Comparison <span>(Seeking Alpha)<\/span><\/p>\n<\/figcaption><\/figure>\n<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">For the balance sheet, the firm ended the quarter with $215.8 million in cash and equivalents and no debt.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">In the last twelve months, free cash flow was an unimpressive $1.2 million, during which capital expenditures were only $0.9 million. The company paid $4.9 million in stock-based compensation in the last four quarters, the highest trailing twelve-month figure in the past eleven quarters.<\/p>\n<h2 class=\"paywall-full-content invisible no-summary-bullets\">Valuation And Other Metrics For Docebo<\/h2>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Below is a table of relevant capitalization and valuation figures for the company.<\/p>\n<p> <span class=\"table-responsive paywall-full-content invisible no-summary-bullets\"><span class=\"table-scroll-wrapper\"><span data-intersection-boundary=\"start\"><\/span><\/p>\n<table>\n<colgroup>\n<col>\n<col> <\/colgroup>\n<tr>\n<td>\n<p><strong>Measure [TTM]<\/strong><\/p>\n<\/td>\n<td>\n<p><strong>Amount<\/strong><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>Enterprise Value \/ Sales<\/p>\n<\/td>\n<td>\n<p>7.0<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>Enterprise Value \/ EBITDA<\/p>\n<\/td>\n<td>\n<p>NM<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>Price \/ Sales<\/p>\n<\/td>\n<td>\n<p>8.4<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>Revenue Growth Rate<\/p>\n<\/td>\n<td>\n<p>33.0%<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>Net Income Margin<\/p>\n<\/td>\n<td>\n<p>10.0%<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>EBITDA %<\/p>\n<\/td>\n<td>\n<p>-1.7%<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>Net Debt To Annual EBITDA<\/p>\n<\/td>\n<td>\n<p>83.0<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>Market Capitalization<\/p>\n<\/td>\n<td>\n<p>$1,280,000,000<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>Enterprise Value<\/p>\n<\/td>\n<td>\n<p>$1,060,000,000<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>Operating Cash Flow<\/p>\n<\/td>\n<td>\n<p>$2,080,000<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>Earnings Per Share (Fully Diluted)<\/p>\n<\/td>\n<td>\n<p>$0.44<\/p>\n<\/td>\n<\/tr>\n<\/table>\n<p> <span data-intersection-boundary=\"end\"><\/span><\/span><button class=\"table-enlarge-button\"><svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewbox=\"0 0 16 16\" class=\"table-enlarge-icon\"><path fill-rule=\"evenodd\" clip-rule=\"evenodd\" d=\"M16 11a5 5 0 0 1-5 5H5a5 5 0 0 1-5-5V5a5 5 0 0 1 5-5h6a5 5 0 0 1 5 5v6zm-4.5-2.5h2v-6h-6v2h4v4zm-9-1h2v4h4v2h-6v-6z\"><\/path><\/svg>Click to enlarge<\/button><\/span> <\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">(Source &#8211; Seeking Alpha.)<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">As a reference, a relevant partial public comparable would be Instructure; shown below is a comparison of their primary valuation metrics.<\/p>\n<p> <span class=\"table-responsive paywall-full-content invisible no-summary-bullets\"><span class=\"table-scroll-wrapper\"><span data-intersection-boundary=\"start\"><\/span><\/p>\n<table>\n<colgroup>\n<col>\n<col>\n<col>\n<col> <\/colgroup>\n<tr>\n<td>\n<p><strong>Metric [TTM]<\/strong><\/p>\n<\/td>\n<td>\n<p><strong>Instructure<\/strong><\/p>\n<\/td>\n<td>\n<p><strong>Docebo<\/strong><\/p>\n<\/td>\n<td>\n<p><strong>Variance<\/strong><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>Enterprise Value \/ Sales<\/p>\n<\/td>\n<td>\n<p>8.5<\/p>\n<\/td>\n<td>\n<p>7.0<\/p>\n<\/td>\n<td>\n<p>-18.3%<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>Enterprise Value \/ EBITDA<\/p>\n<\/td>\n<td>\n<p>29.7<\/p>\n<\/td>\n<td>\n<p>NM<\/p>\n<\/td>\n<td>\n<p>&#8211;%<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>Revenue Growth Rate<\/p>\n<\/td>\n<td>\n<p>15.5%<\/p>\n<\/td>\n<td>\n<p>33.0%<\/p>\n<\/td>\n<td>\n<p>113.1%<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>Net Income Margin<\/p>\n<\/td>\n<td>\n<p>-8.3%<\/p>\n<\/td>\n<td>\n<p>10.0%<\/p>\n<\/td>\n<td>\n<p>&#8211;%<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>Operating Cash Flow<\/p>\n<\/td>\n<td>\n<p>$125,300,000<\/p>\n<\/td>\n<td>\n<p>$2,080,000<\/p>\n<\/td>\n<td>\n<p>-98.3%<\/p>\n<\/td>\n<\/tr>\n<\/table>\n<p> <span data-intersection-boundary=\"end\"><\/span><\/span><button class=\"table-enlarge-button\"><svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewbox=\"0 0 16 16\" class=\"table-enlarge-icon\"><path fill-rule=\"evenodd\" clip-rule=\"evenodd\" d=\"M16 11a5 5 0 0 1-5 5H5a5 5 0 0 1-5-5V5a5 5 0 0 1 5-5h6a5 5 0 0 1 5 5v6zm-4.5-2.5h2v-6h-6v2h4v4zm-9-1h2v4h4v2h-6v-6z\"><\/path><\/svg>Click to enlarge<\/button><\/span> <\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">(Source &#8211; Seeking Alpha.)<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">The Rule of 40 is a software industry rule of thumb that says that as long as the combined revenue growth rate and EBITDA percentage rate equal or exceed 40%, the firm is on an acceptable growth\/EBITDA trajectory.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">DCBO\u2019s most recent Rule of 40 calculation was 31.3% as of Q1 2023\u2019s results, so the firm\u2019s results for this metric have dropped since Q3 2022, per the table below.<\/p>\n<p> <span class=\"table-responsive paywall-full-content invisible no-summary-bullets\"><span class=\"table-scroll-wrapper\"><span data-intersection-boundary=\"start\"><\/span><\/p>\n<table>\n<colgroup>\n<col>\n<col>\n<col> <\/colgroup>\n<tr>\n<td>\n<p><strong>Rule of 40 Performance<\/strong><\/p>\n<\/td>\n<td>\n<p><strong>Q3 2022<\/strong><\/p>\n<\/td>\n<td>\n<p><strong>Q1 2023<\/strong><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>Revenue Growth %<\/p>\n<\/td>\n<td>\n<p>43.5%<\/p>\n<\/td>\n<td>\n<p>33.0%<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>EBITDA %<\/p>\n<\/td>\n<td>\n<p>-7.3%<\/p>\n<\/td>\n<td>\n<p>-1.7%<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>Total<\/p>\n<\/td>\n<td>\n<p>36.2%<\/p>\n<\/td>\n<td>\n<p>31.3%<\/p>\n<\/td>\n<\/tr>\n<\/table>\n<p> <span data-intersection-boundary=\"end\"><\/span><\/span><button class=\"table-enlarge-button\"><svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewbox=\"0 0 16 16\" class=\"table-enlarge-icon\"><path fill-rule=\"evenodd\" clip-rule=\"evenodd\" d=\"M16 11a5 5 0 0 1-5 5H5a5 5 0 0 1-5-5V5a5 5 0 0 1 5-5h6a5 5 0 0 1 5 5v6zm-4.5-2.5h2v-6h-6v2h4v4zm-9-1h2v4h4v2h-6v-6z\"><\/path><\/svg>Click to enlarge<\/button><\/span> <\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">(Source &#8211; Seeking Alpha.)<\/p>\n<h2 class=\"paywall-full-content invisible no-summary-bullets\">Commentary On Docebo<\/h2>\n<p class=\"paywall-full-content invisible no-summary-bullets\">In its last earnings call (Source &#8211; Seeking Alpha), covering Q1 2023\u2019s results, management highlighted the momentum it is seeing due to investments in new European markets, resulting in closing large deals in Germany and France.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">However, leadership noted longer sales cycles in the enterprise segment.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">The firm is also focusing on reducing expenses and recently eliminated middle management positions in order to flatten the organization and speed decision-making.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">The company\u2019s gross retention was flat sequentially and net retention rate dropped slightly due to \u2018lower fee and module expansion.\u2019<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Total revenue for Q1 2023 grew by an impressive 29.3% YoY while gross profit margin increased by one percentage point.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Selling, G&amp;A expenses as a percentage of revenue fell by 7.2% year-over-year, indicating increasing efficiency in this regard and operating losses dropped sharply YoY, to slightly under breakeven.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">The company&#8217;s financial position is solid, with plenty of liquidity, no debt. Free cash flow has been minimal.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">DCBO\u2019s Rule of 40 performance has dropped in comparison to Q3 2022\u2019s results, a negative trend.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Looking ahead, management only provided revenue guidance for Q2 2023. Based on actual and expected revenue growth through Q2, my 2023 topline revenue growth estimate is 24% versus 2022\u2019s growth rate of 37%.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">If achieved, this would represent a drop in year-over-year growth rate, which is consistent with what I\u2019m seeing from other enterprise SaaS providers.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">From management\u2019s most recent earnings call, I prepared a chart showing the frequency of key terms mentioned (or not) in the call, as shown below.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">\n<figure class=\"regular-img-figure paywall-full-content invisible\" contenteditable=\"false\"><picture> <img decoding=\"async\" src=\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/07\/saupload_Ymj8K506_RGSpH9NUGXan1lVKpYUASDhL6XUflzZ3XYefqh2RbpQPc9GFAMEEq99oK02xL2iAvYK-gWJtSfv5UMNKUnbY5-sqh1wcV7IVk9vklmJ5LtSU5j-r9o58HA-1PAu8Qdk2uQFDdfGAnTewf4.png\" alt=\"Earnings Transcript Key Term Frequency\" contenteditable=\"false\" loading=\"lazy\"> <\/picture><figcaption>\n<p class=\"item-caption\">Earnings Transcript Key Term Frequency <span>(Seeking Alpha)<\/span><\/p>\n<\/figcaption><\/figure>\n<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">I\u2019m most interested in the frequency of potentially negative terms, so management or analyst questions cited &#8220;Challeng[es][ing]&#8221; four times, &#8220;Macro&#8221; seven times, &#8220;Drop&#8221; once, and &#8220;Volatil[e][ity]&#8221; once.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Analysts questioned company leadership about the impact of AI technologies on e-learning.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Management responded that e-learning content companies may have problems due to the rise of AI and machine learning, but that Docebo is a distribution company and its Shape system is becoming a competitor to e-learning content companies via its own content to which management is adding AI capabilities.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Regarding valuation, the market is valuing DCBO at an EV\/Sales multiple of around 7x on a TTM revenue growth rate of 37% against a median Meritech SaaS Index implied ARR growth rate of 21% (Source).<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">The Meritech Capital Index of publicly held SaaS application software companies showed an average forward EV\/Revenue multiple of around 8.8x on July 2, 2023, as the chart shows here:<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">\n<figure class=\"regular-img-figure paywall-full-content invisible\" contenteditable=\"false\"><picture> <img decoding=\"async\" src=\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/07\/saupload_FQcTY8RhSYj_YaHs7i14YmqqsyOrdT46ivL_Nczn00LD_mXTjQ8vmo94rzVHqLNrmiuhxzxz_pdOyQux69B0f4rAy7IQmi-pZcWDzNBleNKafWQXG0s28hMr20Yn_7-ogUjx3hVBYA-3ArHhS1mbiec_thumb1.jpeg\" alt=\"EV\/Next 12 Months Revenue Multiple Index\" contenteditable=\"false\" loading=\"lazy\"> <\/picture><figcaption>\n<p class=\"item-caption\">EV\/Next 12 Months Revenue Multiple Index <span>(Meritech Capital)<\/span><\/p>\n<\/figcaption><\/figure>\n<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">So, by comparison, DCBO is currently valued by the market at a discount to the broader Meritech Capital SaaS Index, at least as of July 2, 2023 and assuming a higher-than-average growth rate.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Risks to the company\u2019s outlook include an economic slowdown that may be underway, reduced credit availability which may affect customer\/prospect spending plans and lengthening sales cycles which may reduce its revenue growth potential in the near term.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Docebo\u2019s stock has performed well in recent quarters in line with the general &#8220;re-rating&#8221; of technology stocks.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">A question is how DCBO will perform in the near term as management notes continued slowness in enterprise decision-making.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Assuming a slowdown in DCBO\u2019s revenue growth rate in 2023 versus 2022\u2019s growth rate, which is currently consistent with other SaaS companies, I\u2019m Neutral [Hold] on Docebo Inc. in the near term.<\/p>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/seekingalpha.com\/article\/4619304-slowing-enterprise-buying-environment-should-weigh-on-docebo-in-2023?source=feed_all_articles\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A Quick Take On Docebo Docebo Inc. (NASDAQ:DCBO) provides a suite of online learning capabilities with AI-enhanced functions to improve learning results for organizations of all sizes. I previously wrote about Docebo with a Buy outlook. Management is seeing slow decision-making and longer sales cycles from large enterprise clients. Assuming a slowdown in Docebo Inc.\u2019s [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":39946,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[236],"tags":[83],"class_list":["post-39945","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-news","tag-featured","post_format-post-format-gallery"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Slowing Enterprise Buying Environment Should Weigh On Docebo In 2023 (NASDAQ:DCBO) | iFintechWorld<\/title>\n<meta name=\"description\" content=\"A Quick Take On Docebo Docebo Inc. 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