Stock Story -
What Happened?
Shares of healthcare professional network Doximity (NYSE:DOCS) jumped 48.2% in the afternoon session after the company reported impressive third-quarter earnings, which blew past analysts' revenue, EPS, and EBITDA expectations.Sales improved significantly, driven by robust platform engagement, particularly in new products like AI-powered workflow tools and the expanded client portal. The improved engagement facilitated upselling among top pharma clients.
Doximity recorded an impressive 56% adjusted EBITDA margin, highlighting disciplined cost management, which was supported by higher incremental margins from digital products.
The business is observing stabilization in key markets, including strong growth in pharma budgets and increased adoption of digital solutions.
Guidance was also strong as the company lifted its full-year sales outlook, while the EBITDA forecast came in ahead of consensus.
Zooming out, we think this was a strong quarter for the company.
Following the result, Keybanc analyst Scott Schoenhaus upgraded the stock's rating from Neutral to Buy on hopes for momentum to improve heading into the last quarter of the year.
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What The Market Is Telling Us
Doximity’s shares are not very volatile and have only had 9 moves greater than 5% over the last year. Moves this big are rare for Doximity and indicate this news significantly impacted the market’s perception of the business.The biggest move we wrote about over the last year was 3 months ago when the stock gained 35.9% on the news that the company reported strong second quarter earnings. Doximity exceeded analysts' revenue expectations during the quarter. Moving on, next quarter's revenue guidance came in higher than Wall Street's estimates. Overall, we think this was a decent quarter, with some key metrics above expectations.
Doximity is up 106% since the beginning of the year, and at $58.87 per share, has set a new 52-week high. Investors who bought $1,000 worth of Doximity’s shares at the IPO in June 2021 would now be looking at an investment worth $1,111.