Doximity (NYSE:DOCS) stock gained about 16% in the extended trading session yesterday after the company reported an impressive Fiscal fourth-quarter earnings report. The strong performance was driven by higher subscription revenues. Additionally, DOCS provided upbeat revenue and adjusted EBITDA guidance for Fiscal 2025.
Don't Miss our Black Friday Offers:
- Discover the latest stocks recommended by top Wall Street analysts, all in one place with Analyst Top Stocks
- Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter
Doximity is a digital platform that connects medical professionals, providing networking, telehealth, and information-sharing services.
DOCS’ Q4 Results Snapshot
The company reported adjusted earnings of $0.25 per share, which exceeded analysts’ estimates of $0.20 per share. Furthermore, the reported figure increased by 5% from the prior-year quarter. In the meantime, Q4 revenues of $118.1 million rose by 6% year-over-year, surpassing the Street’s estimates of $116.4 billion. The increase can be attributed to a 9% rise in subscription revenues.
During the quarter, Doximity experienced a 114% net revenue retention rate on a trailing twelve-month basis. Importantly, net revenue retention for the top 20 customers was higher at 122%.
Upbeat Outlook
The company expects its Fiscal 2025 revenues to be between $506 million and $518 million, reflecting a year-over-year growth of 7.7% at the midpoint of the range and above analysts’ forecasts of $520.2 million. Also, Docs expects its adjusted EBITDA to be between $238 million and $250 million.
For the first quarter, Doximity expects revenues to be in the range of $119.5 million to $120.5 million and adjusted EBITDA to be between $238 million and $250 million.
Capital Deployment Activity
Backed by a strong capital position, DOCS announced plans to buy back up to $500 million of the company’s Class A common stock. The repurchase program comes with no expiration date.
Is DOCS a Good Stock to Buy?
Overall, the stock has a Hold consensus rating based on four Hold and one Sell recommendations. After a 15% drop in its share price so far in 2024, analysts’ average price target on Doximity stock of $28.20 implies an upside potential of 18.8% from current levels.
Interestingly, investors interested in DOCS stock could consider following Morgan Stanley (MS) analyst Craig Hettenbach. He is the most accurate and profitable analyst covering the stock (in a one-year timeframe). He boasts an average return of 12.51% per rating and a 90% success rate. Click on the image below to learn more.
