Doximity (NYSE:DOCS) Shares Gap Up on Strong Earnings

Key Points

• Doximity shares surged after the company reported fiscal first-quarter revenue of $156.6 million, up 7.3% year over year, and adjusted earnings of $0.29 per share versus the $0.16 consensus estimate.
• Management raised its fiscal 2027 revenue outlook to $671 million-$681 million and said its AI-powered search tool generates about 10 times more revenue than its operating cost, fueling optimism about an additional growth stream.
• Despite the rally, analysts remain cautious: the consensus rating is “Hold” with a $30.10 price target, while second-quarter revenue guidance was roughly in line with estimates and earnings declined from $0.36 per share a year earlier.

Doximity, Inc. (NYSE:DOCS - Get Free Report) shares gapped up before the market opened on Friday following a better than expected earnings announcement. The stock had previously closed at $20.66, but opened at $38.87. Doximity shares last traded at $32.7940, with a volume of 24,559,404 shares trading hands.

The company reported $0.29 earnings per share for the quarter, beating analysts' consensus estimates of $0.16 by $0.13. Doximity had a net margin of 30.40% and a return on equity of 20.40%. The business had revenue of $156.62 million for the quarter. During the same period in the previous year, the firm earned $0.36 EPS. The business's revenue was up 7.3% compared to the same quarter last year.

Doximity News Summary

Here are the key news stories impacting Doximity this week:

• Positive Sentiment: Doximity reported fiscal Q1 revenue of $156.6 million, up 7.3% year over year, while adjusted earnings of $0.29 per share exceeded the broader consensus estimate of $0.16. The company also raised its fiscal 2027 revenue outlook to $671 million-$681 million, above the $670.4 million analyst forecast. CNBC article
• Positive Sentiment: Management said its AI-powered search tool is generating approximately 10 times more revenue than its operating cost. Analysts believe AI-related revenue is not included in the company’s current forecasts, creating the possibility of upside to guidance if adoption continues. Barron's article
• Positive Sentiment: The favorable AI economics and potential for an additional growth stream overshadowed concerns about the quarter’s modest growth rate and drove a strong investor reaction despite the mixed earnings comparisons.
• Neutral Sentiment: Doximity forecast second-quarter revenue of $170 million-$171 million, roughly in line with the $171.1 million consensus estimate. The guidance supports steady growth but does not, by itself, represent a major upward surprise.
• Negative Sentiment: Reported earnings declined from $0.36 per share a year earlier, and some data providers characterized the $0.29 result as a slight miss against a $0.30 estimate. Second-quarter revenue guidance also sits marginally below consensus, leaving execution and AI monetization important to the stock’s elevated growth expectations. Zacks article

Analysts Set New Price Targets

A number of equities analysts have recently issued reports on the company. Barclays reissued an "equal weight" rating and issued a $20.00 target price (down from $38.00) on shares of Doximity in a report on Thursday, May 14th. BMO Capital Markets reiterated a "market perform" rating and issued a $30.00 price target on shares of Doximity in a research report on Friday. Zacks Research upgraded Doximity from a "strong sell" rating to a "hold" rating in a research note on Monday, July 13th. Jefferies Financial Group cut Doximity from a "buy" rating to a "hold" rating and cut their price objective for the company from $51.00 to $19.00 in a report on Thursday, May 14th. Finally, JPMorgan Chase & Co. reduced their target price on shares of Doximity from $33.00 to $28.00 and set a "neutral" rating on the stock in a research note on Thursday, May 14th. Two research analysts have rated the stock with a Strong Buy rating, six have issued a Buy rating, thirteen have assigned a Hold rating and three have assigned a Sell rating to the company. According to data from MarketBeat.com, Doximity presently has an average rating of "Hold" and a consensus target price of $30.10.

Insider Activity

In other news, insider Siddharth Sitaram sold 2,444 shares of the business's stock in a transaction that occurred on Monday, June 8th. The stock was sold at an average price of $20.41, for a total value of $49,882.04. Following the transaction, the insider directly owned 90,706 shares of the company's stock, valued at $1,851,309.46. The trade was a 2.62% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Company insiders own 31.80% of the company's stock.

Institutional Investors Weigh In On Doximity

A number of hedge funds and other institutional investors have recently bought and sold shares of the business. Vanguard Group Inc. lifted its stake in shares of Doximity by 4.1% during the fourth quarter. Vanguard Group Inc. now owns 13,285,485 shares of the company's stock valued at $588,281,000 after acquiring an additional 518,916 shares during the period. UBS Group AG raised its holdings in Doximity by 26.5% during the 4th quarter. UBS Group AG now owns 680,260 shares of the company's stock worth $30,122,000 after purchasing an additional 142,408 shares during the last quarter. Carmignac Gestion lifted its position in Doximity by 127.8% during the 1st quarter. Carmignac Gestion now owns 4,311,997 shares of the company's stock valued at $100,480,000 after purchasing an additional 2,418,971 shares during the period. Northwestern Mutual Wealth Management Co. boosted its stake in shares of Doximity by 325,436.6% in the 4th quarter. Northwestern Mutual Wealth Management Co. now owns 1,298,891 shares of the company's stock valued at $57,515,000 after purchasing an additional 1,298,492 shares during the last quarter. Finally, Rhenman & Partners Asset Management AB boosted its stake in shares of Doximity by 174.1% in the 4th quarter. Rhenman & Partners Asset Management AB now owns 372,750 shares of the company's stock valued at $16,505,000 after purchasing an additional 236,750 shares during the last quarter. 87.19% of the stock is owned by institutional investors and hedge funds.

Doximity Stock Performance

The firm's 50-day moving average price is $21.16 and its 200 day moving average price is $24.35. The company has a market cap of $5.80 billion, a price-to-earnings ratio of 32.99, a PEG ratio of 7.85 and a beta of 1.29.

Doximity Company Profile

Doximity, trading as DOCS, operates a digital professional network and communications platform designed primarily for clinicians. Headquartered in San Francisco, the company connects physicians, nurse practitioners, physician assistants and other healthcare professionals, providing tools that streamline clinical communication, telehealth delivery and access to specialty-specific medical information. Its platform is positioned as a professional hub where clinicians manage their workflows, stay current with medical news and collaborate securely with peers.

The company’s offerings include secure messaging and video telehealth capabilities that enable clinicians to consult with patients and colleagues while protecting patient information.

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