Canadians looking to invest in quality growth stocks should consider adding Docebo (TSX: DCBO) to their portfolio. Valued at a market cap of $840 million, this small-cap TSX stock is down 75% from all-time highs, allowing you to buy the dip.
Docebo provides a cloud-based learning management platform that helps organizations deliver, manage, and monetize training programs. The platform includes core features like personalized course delivery, off-the-shelf content libraries, advanced analytics and reporting tools, and AI-powered content creation.
Docebo offers modules for building learner communities, selling training content through e-commerce, and creating custom learning experiences outside the traditional platform environment.
The company also provides specialized integrations with Salesforce and Microsoft Teams, mobile app publishing capabilities, and solutions for training external audiences, such as customers and partners.
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The bull case for this TSX tech stock
Docebo delivered third-quarter results that showed the underlying strength of its core learning management platform business, though headline numbers masked solid execution beneath the surface.
The company added US$2.5 million in sequential annual recurring revenue (ARR). However, excluding the impact of the wind-down of its Dayforce partnership, ARR rose 14% year over year.
Notably, Docebo reported an EBITDA (earnings before interest, tax, depreciation, and amortization) of 20%, which indicates an improvement in operational leverage.
On the Dayforce front, management provided specific guidance on how that partnership will phase out. The relationship currently represents 6.2% of ARR and is expected to decline to roughly 3.5% to 4.5% of total revenue in 2026, then drop to 1% to 2% in 2027 before it turns immaterial. The accelerated wind-down happened faster than anticipated, but hasn’t derailed overall momentum.
Docebo made notable progress in the government sector following its FedRAMP certification in May. The company has already secured two new federal customers, including an expansion with the Department of Energy and a deal with the Air Force Cyber Academy through its partner, Deloitte.
Management had originally expected federal wins to materialize in the second half of fiscal 2026, making these early victories particularly impressive. The FedRAMP certification is also helping Docebo win more business in state and local government markets, where similar security requirements are increasingly in place.
Docebo continues to advance its AI strategy with products like Harmony Search, which has already powered half a million queries since launch.
Docebo introduced an AI credit-based consumption model for modules like AI Virtual Coach and AI Video Presenter, aiming to monetize AI capabilities more directly going forward.
Enterprise wins included notable customers such as Veolia, a French multinational with over 200,000 employees, and a third department at Amazon, despite the pending termination of the AWS Skill Builder contract.
Is this TSX stock undervalued?
Docebo has underperformed the broader market by a wide margin due to slowing growth. The e-learning platform increased revenue from US$41.44 million in 2019 to US$217 million in 2024, indicating an annual growth rate of almost 40%. Comparatively, its top-line is forecast to grow by “just” 9.3% annually between 2025 and 2029, given consensus price targets.
While Docebo’s top-line growth is decelerating, its profit margins are forecast to expand steadily. Wall Street estimated adjusted earnings per share to expand from $1.28 per share in 2025 to $2.87 per share in 2029. If the TSX tech stock is priced at 15 times forward earnings, which is quite cheap, it should gain 50% within the next three years.
