Why Doximity (DOCS) Shares Are Trading Lower Today
On the other hand, Doximity blew past analysts' revenue and EBITDA expectations this quarter. Overall, this was a weaker quarter.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Doximity? Access our full analysis report here, it's free.
Doximity's shares are very volatile and have had 24 moves greater than 5% over the last year. But moves this big are rare even for Doximity and indicate this news significantly impacted the market's perception of the business.
The biggest move we wrote about over the last year was 6 months ago when the stock gained 48.2% on the news that the company reported impressive third-quarter earnings, which blew past analysts' revenue, EPS, and EBITDA expectations.
Sales improved significantly, driven by robust platform engagement, particularly in new products like AI-powered workflow tools and the expanded client portal. The improved engagement facilitated upselling among top pharma clients. The company recorded an impressive 56% adjusted EBITDA margin, highlighting disciplined cost management, which was supported by higher incremental margins from digital products. The business observed stabilization in key markets, including strong growth in pharma budgets and increased adoption of digital solutions.
Guidance was also strong as the company lifted its full-year sales outlook, while the EBITDA forecast came in ahead of consensus.
Zooming out, we think this was a strong quarter for the company. Following the result, Keybanc analyst Scott Schoenhaus upgraded the stock's rating from Neutral to Buy on hopes for momentum to improve heading into the last quarter of the year.
Doximity is down 2.4% since the beginning of the year, and at $52.25 per share, it is trading 37.2% below its 52-week high of $83.14 from February 2025. Investors who bought $1,000 worth of Doximity's shares at the IPO in June 2021 would now be looking at an investment worth $985.99.
Today's young investors likely haven't read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.
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