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Why Docebo Stock Fell 13% in September

By Beth McKenna – Oct 6, 2021 at 8:17AM

Key Points

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Shares of the learning management platform operator have gained 47% since last December's initial public offering on a U.S. stock exchange.

What happened

Shares of Docebo (DCBO 0.03%), which calls itself "a leading artificial intelligence-powered learning suite provider," fell 13.4% in September, according to data from S&P Global Market Intelligence. This decline is probably largely attributable to market dynamics, as growth stocks were hit particularly hard last month.

For context, the S&P 500 and Nasdaq Composite indexes declined 4.8% and 5.3%, respectively, last month.

Last December, the Canada-based company held its U.S. initial public offering. Since its debut on the Nasdaq, the stock is up 47.2% through Oct. 5.

Person sitting in front of a laptop.

Image source: Getty Images.

So what

Last month's market sell-off was particularly hard on growth stocks in general and, more specifically, on the stocks of tech companies that aren't profitable. Docebo fits this bill.

Docebo stock had a strong run in August, gaining more than 26% in the month compared to the broader market's 3% return. So, some profit-taking in September wasn't surprising.

The stock's robust performance in August was probably due in part to a continuation of the momentum it had enjoyed for several months and in part to the company's release of its second-quarter results. Shares gained 9.1% in the two-day period following the Aug. 12 release, while the broader market was only up about 0.5% over this period. 

In the second quarter, Docebo's revenue jumped 76% year over year to $25.6 million, driven by a 76% surge in subscription revenue to $23.6 million. Compared to the year-ago period, the company's customer count rose 29% to 2,485, and its average contract size increased 27% to $37,569.

Net loss in the quarter was $7.2 million, or $0.22 per share, compared to a net loss of $3.5 million, or $0.12 per share, in the year-ago quarter.

The company's big-name new customer wins in the quarter include athletic wear-focused retailer Lululemon Athletica, real estate giant RE/MAX, and Red Roof Inn. (As to Lululemon, last month it turned in a stellar fiscal Q2 earnings report, with year-over-year revenue, earnings per share, and adjusted earnings per share soaring 61%, 141%, and 123%, respectively.) 

Now what

Docebo management didn't provide guidance. But on last quarter's earnings call, CFO Ian Kidson said, "Going forward, our primary focus will be to continue to drive our growth, but we're finally getting to the point where we expect to begin to realize greater benefits from our scale."

Growth investors might want to put fast-growing Docebo on their watch list. 

Beth McKenna has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Docebo Inc. and Lululemon Athletica. The Motley Fool has a disclosure policy.

Stocks Mentioned

Docebo Inc. Stock Quote
Docebo Inc.
$32.87 (0.03%) $0.01
Lululemon Athletica Stock Quote
Lululemon Athletica
$385.99 (1.09%) $4.17

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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