The e-learning industry has surged in recent years, driven by rising demand for remote learning, upskilling, and the widespread adoption of digital platforms in education and corporate sectors. Additionally, increased internet access and faster connectivity are further fueling the growth of digital education worldwide.

The growing availability of mobile-based learning apps and higher education institutions integrating e-learning modules to offer hybrid and distance-learning programs are enhancing the prospects of the industry. That said, the global e-learning services market is forecasted to reach $842.60 million by 2030, growing at an impressive CAGR of 19%.

Amid this growth, Docebo Inc. (DCBO - Get Rating) stands out as a leading figure in the aforementioned industry, offering an artificial intelligence (AI)-powered learning platform for organizations and individuals. DCBO’s shares have surged 10.4% over the past six months, closing the last trading session at $42.87.

Now, let us dive deeper into the factors that could shape DCBO’s performance in the near future.

Recent Developments

On November 11, 2024, DCBO announced a strategic alliance with Deloitte to aid mid-size and large organizations in building robust, growth-focused learning ecosystems. This collaboration combines DCBO’s cutting-edge learning technology with Deloitte’s consulting and implementation knowledge and could enhance the company’s market presence amid the corporate space.

On October 2, DCBO partnered with TEDAI for the TEDAI Vienna event, serving as the business learning partner. DCBO played a key role in showcasing how enterprises can harness AI to transform workplace learning and development. The collaboration is a testament to the company’s commitment to reshape the future of work through AI.

Sound Financials

For the fiscal 2024 third quarter that ended on September 30, DCBO’s revenue increased 19.2% year-over-year to $55.43 million. Its operating income grew 51.7% from the year-ago value to $4.72 million.

Additionally, the company’s adjusted net income and adjusted EPS rose 66.7% and 80% from the prior year’s quarter to $8.26 million and $0.27, respectively. As of September 30, 2024, DCBO’s cash and cash equivalents amounted to $82.03 million, compared to $71.95 million on December 31, 2023.

Optimistic Analyst Estimates

Analysts predict DCBO’s revenue and EPS for the fiscal 2025 first-quarter ending in March to increase 13.9% and 20.7% year-over-year to $58.52 million and $0.28, respectively. In addition, the company exceeded the consensus revenue and EPS estimates in each of the four trailing quarters, which is impressive.

Looking at the full fiscal year that ended December 2025, DCBO’s revenue and EPS are expected to rise 14.3% and 30.2% year-over-year to $247.11 million and $1.31, respectively.

High Profitability

DCBO’s trailing-12-month gross profit margin of 80.85% is 60% higher than the industry average of 50.55%. Its trailing-12-month net income margin stands at 8.63%, 126.9% higher than the industry average of 3.80%.

In addition, the company boasts a trailing-12-month levered FCF margin of 14.92%, which is 32.7% higher than the sector average of 11.24%. Also, the stock’s trailing-12-month ROCE of 19.97% outperforms the industry average of 4.22% by 373.5%.

POWR Ratings Reflects Optimism

DCBO’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, which equates to a Strong Buy in our proprietary rating system. The POWR Ratings are calculated by taking into account 118 different factors, with each factor weighted to an optimal degree.

DCBO has an A grade for Sentiment, which is in line with the optimistic analyst estimates. Plus, the stock holds a B grade for Quality, supported by profitability measures that exceeded industry benchmarks.

Within the B-rated Software – Application industry, DCBO is ranked #5 out of 124 stocks. Beyond what is stated above, we have also given DCBO grades for Momentum, Value, Stability, and Growth. Get all DCBO ratings here.

Bottom Line

DCBO has established itself as a titan in the e-learning industry with cutting-edge AI-powered learning offerings that have played an important role in training internal and external workforces, partners, and customers. The company’s growth prospects seem robust as the industry expands.

Given DCBO’s impressive analyst estimates, high profitability, and strategic industry position, now could be the ideal time to consider adding the stock to your portfolio.

How Does Docebo Inc. (DCBO) Stack Up Against Its Peers?

Although DCBO’s near-term outlook appears sound, it may be worthwhile to explore its industry peers, who also exhibit strong POWR Ratings. So, consider these A (Strong Buy) rated stocks from the Software – Application industry:

Progress Software Corporation (PRGS - Get Rating)

IBEX Ltd. (IBEX - Get Rating)

Heartcore Enterprises Inc. (HTCR - Get Rating)

To explore more A or B-rated Software – Application stocks, click here.

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DCBO shares were unchanged in premarket trading Friday. Year-to-date, DCBO has declined -4.24%, versus a 0.95% rise in the benchmark S&P 500 index during the same period.

About the Author: Aritra_Gangopadhyay

Aritra is a financial journalist dedicated to breaking down complex financial topics into simple, actionable insights. Holding a Master’s degree in Economics, he uses his analytical expertise to help investors uncover unique opportunities for long-term success. More...

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