What is DCBO.TO's Intrinsic value?

Docebo Inc (DCBO.TO) Intrinsic Value Analysis

Executive Summary

As of April 2, 2026, Docebo Inc's estimated intrinsic value ranges from $15.03 to $55.43 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $47.13 +93.3%
Discounted Cash Flow (5Y) $34.50 +41.5%
Dividend Discount Model (Multi-Stage) $29.51 +21.1%
Dividend Discount Model (Stable) $55.43 +127.3%
Earnings Power Value $15.03 -38.4%

Is Docebo Inc (DCBO.TO) undervalued or overvalued?

With the current market price at $24.38, the stock appears to be significantly undervalued.

Understanding Intrinsic Value

Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Docebo Inc's intrinsic value, including:

  1. Discounted Cash Flow (DCF): Values the company based on projected future cash flows
  2. Dividend Discount Model (DDM): Values the company based on expected future dividend payments
  3. Earnings Power Value (EPV): Values the company based on its current earnings power, assuming no growth

Weighted Average Cost of Capital (WACC)

The cost of capital is a critical factor in valuation models, representing the required return for investors.

WACC Component Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.62 0.75
Cost of equity 6.3% 8.7%
Cost of debt 5.0% 5.0%
Tax rate 11.6% 24.2%
Debt/Equity ratio 0.01 0.01
After-tax WACC 6.3% 8.7%

Valuation Methods

1. Discounted Cash Flow (DCF) Valuation

Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:

  • Forecast Period: 5-year DCF and 10-year DCF
  • Terminal Growth Rate: 0.0% (range: 3.0% - 5.0%)
  • Discount Rate: 7.5% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $243 (FY12-2025) to $688 (FY12-2035)
  • Net profit margin expansion from 15% to 9%
  • Capital expenditures maintained at approximately 1% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $25 $643M 82.5%
10-Year Growth $34 $904M 72.2%
5-Year EBITDA $16 $383M 70.7%
10-Year EBITDA $22 $553M 54.6%

2. Dividend Discount Model (DDM)

The DDM values a company based on its expected future dividend payments. We used two approaches:

Multi-Stage DDM:

  • Current payout ratio: 0.0%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 7.5%
  • Long-term growth rate: 3.5%
  • Fair value: $29.51 (21.1% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 8.7% (Low) to 6.3% (High)
  • Long-term growth rate: 2.5% (Low) to 4.5% (High)
  • Fair value range: $15 to $65
  • Selected fair value: $55.43 (127.3% from current price)

3. Earnings Power Value (EPV)

EPV assesses a company's value based on its current normalized earnings power, assuming no growth.

EPV Component Value
Normalized Earnings $17M
Discount Rate (WACC) 8.7% - 6.3%
Enterprise Value $201M - $278M
Net Debt $(71)M
Equity Value $273M - $349M
Outstanding Shares 29M
Fair Value $9 - $12
Selected Fair Value $15.03

Key Financial Metrics

Metric Value
Market Capitalization $701M
Enterprise Value $602M
Trailing P/E 13.45
Forward P/E 21.12
Trailing EV/EBITDA 9.20
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 0.01

Investment Decision Framework

To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:

  1. Forecast Certainty: DCF methods rely on long-term projections, while earnings power value focuses on current normalized earnings
  2. Business Model Alignment: Dividend models are more appropriate for mature companies with established dividend policies
  3. Historical Accuracy: How well each method has predicted fair value historically

Valuation Weight Matrix

Valuation Method Weight Weighted Value
Discounted Cash Flow (10Y) 30% $14.14
Discounted Cash Flow (5Y) 25% $8.62
Dividend Discount Model (Multi-Stage) 20% $5.90
Dividend Discount Model (Stable) 15% $8.31
Earnings Power Value 10% $1.50
Weighted Average 100% $38.48

Investment Conclusion

Based on our comprehensive valuation analysis, Docebo Inc's intrinsic value is $38.48, which is approximately 57.8% above the current market price of $24.38.

Key investment considerations:

  • Strong projected earnings growth (15% to 9% margin)
  • Consistent cash flow generation
  • Conservative capital structure (Debt/Equity of 0.01)

Given these factors, we believe Docebo Inc is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.