Doximity downgraded to Equal Weight on slowing ad growth at Wells Fargo

Wells Fargo analyst Stan Berenshteyn downgraded Doximity to Equal Weight from Overweight with a price target of $37, down from $39. The firm’s pharma survey points to slower advertising budget market growth. While Doximity’s business appears defensible, a slower pace for the market keeps fiscal 2024 revenue estimates below guidance and "dampens prospects" for a bull case scenario, the analyst tells investors in a research note. Wells’ Doximity client survey suggests digital 2023 ad budgets are growing mid- to high-single digits, which is a deceleration from the low double-digit outlook anticipated from September of last year. Doximity’s path to 20% sales growth in fiscal 2024 is achievable, but with the end market appearing to slow, sources for upside may be limited, the analyst tells investors in a research note.