Q: This has hit my radar, but I have concern that it is overvalued. Your thoughts would be valuable please.
5i Research Answer:
DCBO is a low double-digit to high single-digit grower on the top-line but is expected to grow EPS by 49% this year and 16% in 2026. Fundamentally it is solid with next to no debt and good margins and ROE. The company has been seeing some customer churn which has weighed on results and led to an ARR miss which markets do not like to see with software names. The potential growth pipeline looks good still though and metrics are generally moving in the right direction. Shares now trade just shy of 14X earnings for a profitable and groing company and we think it looks interesting at these levels. It might take another quarter or two for markets to care but a lot of bad news is likely priced in at this valuation.