Analyst Scott Berg from Needham reiterated a Buy rating on Doximity (DOCS – Research Report) and increased the price target to $82.00 from $65.00.
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Scott Berg has given his Buy rating due to a combination of factors that highlight Doximity’s strong performance and future potential. The company recently reported an exceptional third quarter, largely driven by upsells that contributed to surpassing revenue expectations and achieving record adjusted EBITDA margins exceeding 60%. One key factor that supports this rating is the success of new products like point of care, formulary, and integrated programs, which have not only enhanced growth but also led to a positive shift in revenue recognition timing, bolstering fiscal year 2025 guidance.
Furthermore, the robust performance during the peak selling season indicates that Doximity’s buying cycle exceeded expectations, showcasing the company’s ability to capitalize on market opportunities. Despite some revenue being realized earlier than anticipated, Scott Berg remains confident in Doximity’s ability to sustain high single-digit growth, supported by the company’s projection of end market growth between 5% and 7%. This growth trajectory, along with the company’s impressive margin profile, suggests that Doximity continues to offer significant value even at premium valuation levels.
Berg covers the Technology sector, focusing on stocks such as Salesforce, Five9, and UiPath. According to TipRanks, Berg has an average return of -1.4% and a 47.40% success rate on recommended stocks.
In another report released today, Leerink Partners also upgraded the stock to a Buy with a $90.00 price target.