Forget Meme Stocks: Buy This Top Tech Stock Instead!

Docebo stock is a much better alternative to meme stocks if you are a growth-seeking investor looking to grow your wealth.

| More on:
Overhead shot of young adults using technology at a table

Image source: Getty Images

The rise of Redditor-fueled meme stocks is not news to anyone with an internet connection, regardless of whether they are even remotely interested in the stock market. Retail investors banded together to cause an artificial rally in share prices for several stocks like GameStop and AMC Entertainment in a bid to pull off a short-squeeze and outplay Wall Street players.

While the short-squeeze moves died down, last month saw another astonishing rally. Retail investors coordinated another round of short-squeezes that led to a massive spile for these meme stocks that do not possess the fundamentals to justify high prices.

The exponential gains for these stocks attracted several investors looking to make quick profits. However, true wealth generation as a stock market investor comes through long-term investing strategies. Finding companies with long-term potential to derive consistent and outsized returns to beat markets are true wealth-generation stocks that you should consider adding to your portfolio.

Docebo (TSX:DCBO)(NYSE:DCBO) is one such stock that you can consider for this purpose. Today I will discuss this top Canadian tech stock to help you make a more well-informed decision about whether it would make a good addition to your investment portfolio.

Up 400% since Initial Public Offering

Docebo became a publicly traded company in October 2019. Since its debut on the stock market, the Canadian tech company has appreciated by over 400% at writing. Docebo offers cloud-based learning management systems to train internal and external workforces, partners, and customers to its internationally diversified clients.

The company’s client base consists primarily of enterprises relying on its products to expedite learning processes and improving productivity. Docebo’s sales increased by over 61% on a year-over-year basis in Q1 2021 to $US21.7 million. The company’s subscription sales accounted for over 90% of its revenues, raking in $US19.8 million, allowing the company to enjoy a massive gross profit of US$17.9 million.

The company’s annual recurring revenue was 60% higher in Q1 2021 than it was in the same period last year. Docebo reported a negative adjusted EBITDA of US$2.5 million, reflecting 11% of sales. The figure is lower than its negative adjusted EBITDA for the same period last year, reflecting 18% of sales.

Foolish takeaway

Given the developments in the global landscape, Docebo’s growth in recent years has the backing of factors that provide greater potential for sustained growth. There is an increasing demand for services provided by the company.

Unlike Docebo, GameStop’s revenues have declined due to an increasing shift towards digital gaming. Cinema giant AMC Entertainment suffered significant losses due to the pandemic and an increase in online streaming services.

Docebo is trading for $69.30 per share at writing and is down by 16.25% from its all-time high in December 2020. If you are interested in buying the high-quality tech stock as a long-term pick, now could be an ideal time to buy Docebo shares on the dip.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Docebo Inc.

More on Investing

Businessman holding AI cloud
Tech Stocks

Could Investing $20,000 in Nvidia Make You a Millionaire?

Nvidia stock has made investors millionaires in the last 10 years. Is it too late to invest to become a…

Read more »

Engineers walk through a facility.
Dividend Stocks

1 TSX Stock I Wouldn’t Touch With a 10-Foot Pole

AtkinsRéalis (TSX:ATRL) is one TSX stock I'd never invest in.

Read more »

money cash dividends
Stocks for Beginners

Have $500? 3 Absurdly Cheap Stocks Long-Term Investors Should Buy Right Now

If you're looking for cheap stocks, these three have a huge future ahead of them, all while costing far less…

Read more »

edit Woman in skates works on laptop
Dividend Stocks

3 No-Brainer Stocks to Buy Under $30

These three stocks all offer a huge deal for investors looking for dividends, as well as growth that will last.

Read more »

Business man on stock market financial trade indicator background.
Tech Stocks

1 Growth Stock Down 50 Percent to Buy Right Now

There are plenty of growth stocks in the market worth considering, but Shopify (TSX:SHOP) looks like one of the best…

Read more »

You Should Know This
Dividend Stocks

How to Convert a $300 Monthly Investment Into $338 in Monthly Income

If you want a certain amount in monthly passive income, invest a similar amount today and leave the rest to…

Read more »

Increasing yield
Dividend Stocks

3 Income Stocks With Big Yields to Consider in April 2024

If you haven’t yet made your March investments, here are three income stocks to buy the dip and lock in…

Read more »

Senior Man Sitting On Sofa At Home With Pet Labrador Dog
Dividend Stocks

RRSP Investors: Don’t Miss Out on This Contribution Hack!

This hack has so many benefits for you -- not just when you put it in your RRSP but for…

Read more »