The S&P 500 reached a record high in January 2024 for the first time since January 2022, signaling the onset of a new bull market. That bull market actually started when the index reached its bear market low in October 2022. It has since advanced 40%, but history shows plenty of upside left. The S&P 500 returned an average of 169% during past bull markets.

With that in mind, Morgan Stanley analyst Benjamin Swinburne has set a bull-case price target of $125 per share on Roku (ROKU -10.29%). That implies 75% upside in the next year. Similarly, Josh Baer at Morgan Stanley has set a bull-case price target of $115 per share on Docebo (DCBO 1.64%). That implies 150% upside in the next year.

Investors should never anchor to price targets, but Roku and Docebo still warrant a closer look.

1. Roku

Roku posted mixed financial results in the fourth quarter, beating expectations on the top line but missing on the bottom line. Revenue increased 14% to $984 million on solid growth in platform revenue (digital advertising and transaction fees) and devices revenue. But average revenue per user (ARPU) declined 4% to $39.92, signaling a possible loss in pricing power due to competition for advertising dollars with larger companies like Netflix, Amazon, and Apple.

Meanwhile, Roku reported a wider-than-expected GAAP loss of $0.55 per share. That is an improvement from its loss of $1.70 per share last year, but Wall Street was looking for a loss of $0.52 per share. That projection may have been possible had ARPU not declined. On the bright side, management mentioned signs of a rebound in ad spending, which could support better monetization in future quarters. But the stock still crashed following the report.

The investment thesis from here is straightforward. Roku is the most popular TV streaming platform in the U.S. and Mexico, as measured by viewing time. Roku OS is also the top-selling TV operating system in the U.S., Canada, and Mexico. That makes the company a valuable partner to content publishers and advertisers, so Roku should benefit as streaming media continues to displace traditional TV.

The bull-case price target of $125 per share from Morgan Stanley is based on a model that assumes ARPU reaches $45 in 2025, driven by stronger advertising growth. That figure is plausible but unlikely. It would represent a meaningful reacceleration from the 4% decline in the fourth quarter. For that reason alone, the 75% return implied by Morgan Stanley's price target is unlikely.

However, Wall Street expects the company to grow revenue at 18% annually over the next five years. That consensus estimate makes its current valuation of 2.9 times sales look quite cheap. As a caveat, that multiple could contract in the future if Roku's pricing power shows definite signs of erosion in future quarters. Investors comfortable with that risk should consider buying a few shares of this growth stock today.

2. Docebo

Docebo specializes in corporate learning management software. Its platform helps businesses create, deliver, and measure the impact of training content across internal use cases like employees, as well as external use cases like customers and partners. Docebo is a recognized leader in the learning management systems (LMS) market.

Legacy vendors push fixed learning content in a formal setting, but Docebo can inject learning into normal workflows, and uses artificial intelligence (AI) to personalize the content. That novel approach has earned Docebo a leadership position in external LMS use cases, and it's helping the company take share from legacy vendors in internal LMS use cases.

Docebo reported encouraging financial results in the third quarter. Its customer count increased 13% to 3,679, and management mentioned momentum in upselling existing customers. Revenue increased 26% to $46 million, and non-GAAP (adjusted) net income more than tripled to reach $5 million. Investors can expect similar momentum in the future.

Morgan Stanley believes the market is overlooking Docebo Shape, a generative AI application that turns source material like corporate documents and case studies into personalized learning material. Docebo has been investing heavily in Shape, and more capabilities are coming this year, including a natural language interface to simplify content creation and virtual role play to provide real-time feedback.

Morgan Stanley's bull-case price target of $115 per share is based on a discounted cash flow model that assumes annual sales growth of 23% through 2034. That estimate is aggressive but certainly within the realm of possibility, given that the LMS market is forecast to grow at 20% annually through 2030. Docebo should be able to match that pace at a minimum.

In that context, Docebo's current valuation of 9 times sales looks cheap, and that multiple is a nice discount to the three-year average of 13.8 times sales. There is no guarantee shareholders will see triple-digit returns in the next year, but investors with a five-year time horizon should consider buying a small position in this growth stock.