Docebo’s Hold Rating: Balancing Growth Challenges and Limited Upside Potential

In a report released today, Josh Baer from Morgan Stanley downgraded Docebo (DCBO – Research Report) to a Hold, with a price target of $32.00.

Josh Baer has given his Hold rating due to a combination of factors affecting Docebo’s current and future performance. The recent quarterly update revealed a reduction in growth and margins, alongside a significant customer planning to downsize in 2026, which has led to a more realistic but less optimistic guidance for 2025. The challenging macroeconomic environment has historically impacted Learning & Development budgets, and there is uncertainty about when growth stabilization or acceleration might occur.
Despite Docebo’s strengths as a platform poised to replace legacy LMS vendors and its advancements in AI, the early stages of its AI offerings and unclear adoption and monetization paths contribute to the cautious outlook. With the stock trading at a low multiple and a net retention rate around 100%, there is limited downside risk, but revenue growth is expected to slow, and significant executive changes suggest that upside potential is also limited. Therefore, the Hold rating reflects these execution challenges and growth deceleration concerns.

According to TipRanks, Baer is a 3-star analyst with an average return of 3.9% and a 52.46% success rate. Baer covers the Technology sector, focusing on stocks such as DigitalOcean Holdings, Coursera, and Toast Inc.

In another report released today, ATB Capital Markets also downgraded the stock to a Hold with a C$45.00 price target.