Wells Fargo downgrades Doximity to Underweight on slowing growth

Wells Fargo downgraded Doximity to Underweight from Equal Weight with a price target of $19, down from $27. Although Doximity has an attractive financial profile with consistent 35%-plus free cash flow margins, Wells Fargo’s biopharma survey points to slowing growth, the analyst tells investors in a research note. The firm expects this will continue driving a downward rerating in the stock. Wells says the survey shows the percent of clients reporting digital advertising budget growth is shrinking while client wallet mix toward Doximity is approaching a plateau. The survey appears to support further deceleration in revenue tailwinds at the company, contends Wells.