Doximity (DOCS) AI Stock Analysis

735 Followers

Top Page

Doximity

(NYSE:DOCS)

79Outperform

Doximity's strong financial performance and positive earnings call results are the key drivers behind the high score. The technical analysis indicates upward momentum, but high valuation and potential pullback risks from overbought conditions temper the overall assessment. The company's reliance on integrated programs for growth presents a risk, but solid revenue and EBITDA growth offer a positive outlook.

Positive Factors

Growth Potential

The expert expects DOCS to grow even faster in 2025, driven by a strong pipeline and GLP-1 tailwinds.

Revenue Growth

The buying cycle exceeded expectations, with upsells driving topline outperformance.

Negative Factors

Growth Normalization

Next year, growth is expected to normalize to about 2x the market rate, which is in line with the past 4 years, suggesting a potential slowdown compared to the current growth rate.

Regulatory Risks

Expert sees targeting Nurse Practitioners as a potential risk area, fearing increased regulations.

Doximity (DOCS) vs. S&P 500 (SPY)

Market Cap

$9.61B

Dividend YieldN/A

Average Volume (3M)2.47M

Price to Earnings (P/E)51.1

Beta (1Y)1.69

Revenue Growth17.47%

EPS Growth49.87%

CountryUS

Employees827

SectorHealthcare

Sector Strength77

IndustryMedical - Healthcare Information Services

Share Statistics

EPS (TTM)1.00

Shares Outstanding133,502,330

10 Day Avg. Volume2,557,253

30 Day Avg. Volume2,472,380

Financial Highlights & Ratios

PEG Ratio1.03

Price to Book (P/B)N/A

Price to Sales (P/S)21.48

Price to Cash Flow (P/CF)45.30

P/FCF Ratio45.30

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$73.67

Price Target Upside43.77% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering17

Doximity Business Overview & Revenue Model

Company DescriptionDoximity, Inc. operates a cloud-based digital platform for medical professionals in the United States. The company's platform provides its members with tools built for medical professionals, enabling them to collaborate with their colleagues, coordinate patient care, conduct virtual patient visits, stay up to date with the latest medical news and research, and manage their careers. It primarily serves pharmaceutical manufacturers and healthcare systems. The company was formerly known as 3MD Communications, Inc. and changed its name to Doximity, Inc. in June 2010. Doximity, Inc. was incorporated in 2010 and is headquartered in San Francisco, California.

How the Company Makes MoneyDoximity generates revenue through a multi-faceted business model that includes subscription fees, advertising, and telehealth services. A significant portion of its income comes from pharmaceutical companies and healthcare organizations that pay for targeted digital marketing and advertising to reach its network of medical professionals. Additionally, Doximity offers a telehealth platform that allows doctors to conduct video visits with patients, for which healthcare providers pay subscription fees to access premium features and services. The company also leverages partnerships with hospitals and healthcare systems to expand its service offerings, further enhancing its revenue streams.

Doximity Financial Statement Overview

Summary

Doximity presents a robust financial position with consistent revenue growth, high profitability margins, and low leverage. Effective cash flow management and a high equity ratio further strengthen its financial health. Optimizing cash reserves could enhance capital efficiency.

Income Statement

Very Positive

Doximity's income statement shows a strong performance with a consistent revenue growth, illustrated by a 16% increase in TTM revenue compared to the previous annual report. The company maintains robust profitability with a high gross profit margin of 90.2% and a net profit margin of 36.6% for TTM, indicating effective cost management. The EBIT and EBITDA margins are also solid at 40.2% and 42.0%, respectively, reflecting operational efficiency.

Balance Sheet

Positive

The balance sheet of Doximity is stable, with a debt-to-equity ratio of 0.01, indicating low leverage and financial risk. The company has a strong equity ratio of 88.0%, showing a high level of asset financing through equity. Return on Equity (ROE) is impressive at 19.5%, demonstrating effective use of shareholders' funds. However, the relatively high cash reserves might suggest underutilized capital.

Cash Flow

Very Positive

Doximity exhibits strong cash flow health with a free cash flow to net income ratio of 1.19 for TTM, indicating robust cash conversion. The operating cash flow to net income ratio of 1.19 further supports efficient cash generation from operations. Free cash flow growth is substantial, reflecting effective capital management and operational scaling.

TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Breakdown
Income Statement		Total Revenue
550.17M	475.42M	419.05M	343.55M	206.90M	116.39M
	Gross Profit
496.19M	424.75M	365.56M	303.76M	175.70M	101.49M
	EBIT
221.17M	163.88M	125.11M	113.54M	53.30M	22.16M
	EBITDA
231.20M	182.08M	125.11M	113.54M	63.90M	26.41M
	Net Income Common Stockholders
201.34M	147.58M	112.82M	154.78M	50.21M	29.74M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
844.94M	762.90M	841.00M	798.11M	142.53M	86.45M
	Total Assets
1.17B	1.08B	1.14B	991.36M	251.72M	138.92M
	Total Debt
12.95M	14.55M	15.64M	1.09M	1.25M	2.28M
	Net Debt
-152.32M	-82.24M	-142.39M	-111.72M	-65.14M	-46.15M
	Total Liabilities
141.04M	177.98M	170.77M	112.76M	184.98M	137.78M
	Stockholders Equity
1.03B	901.40M	966.12M	878.59M	66.74M	1.14M
Cash Flow		Free Cash Flow
238.77M	178.29M	173.42M	120.88M	78.36M	21.95M
	Operating Cash Flow
240.40M	184.10M	179.60M	126.58M	82.97M	26.20M
	Investing Cash Flow
-81.00M	31.19M	-59.92M	-640.57M	-70.42M	-13.10M
	Financing Cash Flow
-117.22M	-276.52M	-74.46M	560.41M	5.41M	1.72M

Doximity Technical Analysis

Technical Analysis Sentiment

Negative

Last Price51.24

Price Trends

50DMA

65.09

Negative

100DMA

59.47

Negative

200DMA

47.49

Positive

Market Momentum

MACD

-1.99

Positive

RSI

35.76

Neutral

STOCH

8.83

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DOCS, the sentiment is Negative. The current price of 51.24 is below the 20-day moving average (MA) of 60.72, below the 50-day MA of 65.09, and above the 200-day MA of 47.49, indicating a neutral trend. The MACD of -1.99 indicates Positive momentum. The RSI at 35.76 is Neutral, neither overbought nor oversold. The STOCH value of 8.83 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DOCS.

Doximity Risk Analysis

Doximity disclosed 66 risk factors in its most recent earnings report. Doximity reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Doximity Peers Comparison

Overall Rating

UnderperformOutperform

Sector (48)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DOCS	79 Outperform	$9.61B	51.15	21.24%	―	17.47%	49.87%
KRYS	77 Outperform	$4.93B	57.33	10.34%	―	473.02%	1620.44%
TECH	73 Outperform	$8.18B	52.57	7.82%	0.62%	4.46%	-29.62%
HIMS	71 Outperform	$5.77B	48.60	30.71%	―	69.33%	―
HQY	69 Neutral	$6.82B	72.27	4.66%	―	20.03%	71.43%
PCVX	50 Neutral	$4.07B	―	-20.41%	―	―	7.75%
Sector *	48 Neutral	$6.36B	1.14	-49.00%	2.63%	17.14%	1.39%

* Healthcare Sector Average

Performance Comparison

DOCS

Doximity

51.24

25.46

98.76%

TECH

Bio-Techne

51.72

-16.20

-23.85%

HQY

Healthequity

78.80

-0.40

-0.51%

KRYS

Krystal Biotech

171.30

-9.12

-5.05%

HIMS

Hims & Hers Health

25.99

11.11

74.66%

PCVX

Vaxcyte

31.60

-32.49

-50.69%

Doximity Earnings Call Summary

Earnings Call Date: Feb 6, 2025 | % Change Since: -12.05% | Next Earnings Date: May 20, 2025

Earnings Call Sentiment Positive

The earnings call presented a strong performance with significant revenue and EBITDA growth, driven by high client retention and successful new product launches. However, potential challenges include dependency on integrated programs and tougher future revenue comparisons.

Highlights

Significant Revenue Growth

Doximity, Inc. reported $169 million in revenue for Q3 FY2025, marking a 25% year-on-year growth and a 10% beat from the high end of their guidance range.

Record Adjusted EBITDA Margin

The company achieved a record adjusted EBITDA margin of 61%, or $102 million, which was up 39% year-on-year and 21% above the high end of guidance.

Top Clients Showing Strong Growth

The top twenty clients grew 122% on a trailing twelve-month basis, reflecting strong client retention and expansion.

Strong Engagement and Network Growth

Unique active users reached new heights with double-digit percent growth year-on-year. The AI tools saw over 1.8 million prompts, growing rapidly.

Successful New Product Launches

New point of care and formulary products grew over 100% in Q3, accounting for over 20% of pharmaceutical sales.

Incremental Commercial Achievements

Doximity's commercial initiatives, including new products, integrated programs, and the client portal, contributed to strong calendar year-end sales.

Lowlights

Dependence on Integrated Programs for Continued Growth

The company's growth strategy heavily relies on integrated programs and new product traction, which could pose risks if adoption rates slow or market dynamics shift.

Potential Challenges with Tougher Comparisons

The higher percentage of January launches due to integrated programs could lead to tougher revenue comparisons in fiscal 2026.

Health System Business Growth Uncertainty

Although there was some marginal improvement, the health system business is not expected to materially change in growth rate in the near future due to ongoing macroeconomic uncertainties.

Company Guidance

During Doximity, Inc.'s fiscal 2025 third quarter earnings call, the company reported impressive financial performance with $169 million in revenue, marking a 25% year-on-year growth and a 10% beat from the high end of their guidance range. The top twenty clients demonstrated significant growth, with a net revenue retention rate of 122% on a trailing twelve-month basis. The adjusted EBITDA margin was at a record 61%, translating to $102 million, a 39% year-on-year increase. Doximity's network engagement reached new heights, with over one million unique active prescribers utilizing the news feed and 610,000 using workflow tools. The company's new point of care and formulary products saw over 100% growth, contributing to 20% of pharmaceutical sales. For the fourth fiscal quarter of 2025, revenue is expected to be between $132.5 million and $133.5 million, with an adjusted EBITDA margin projected at 47%. For the full fiscal year, the revenue is anticipated to range between $564.6 million and $565.6 million, with an adjusted EBITDA margin of 54%.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.