Analyst Craig Hettenbach of Morgan Stanley maintained a Sell rating on Doximity (DOCS – Research Report), with a price target of $25.00.
Craig Hettenbach has given his Sell rating due to a combination of factors impacting Doximity’s performance and outlook. The company’s Q4 guidance fell short of expectations due to the timing of program launches, which raises concerns about the sustainability of its growth trajectory. Additionally, while the pharma digital ad spending is projected to grow, there is uncertainty about Doximity’s market share going forward. The valuation of the company is considered full, which implies there is little room for growth acceleration that is not already priced into the stock.
Despite a strong third fiscal quarter that surpassed analyst expectations, the guidance for the fourth quarter indicates only a modest year-over-year growth, which is slightly below the consensus. This underwhelming forecast, combined with macroeconomic uncertainty and reduced transparency regarding the video module business, contributes to the Sell rating. Furthermore, although Doximity is taking strategic steps with large accounts and shows strong margin performance, the expected growth in pharma digital ad spending by the company does not align with industry checks that suggest higher growth rates. This disparity casts doubt on the likelihood of multiple expansion or a significant positive shift in business momentum, leading to the decision to maintain a Sell rating.
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Doximity (DOCS) Company Description:
Doximity Inc is a digital platform for U.S. medical professionals. Its cloud-based platform provides members with tools specifically built for medical professionals, enabling them to collaborate with their colleagues, securely coordinate patient care, conduct virtual patient visits, stay up-to-date with the latest medical news and research, and manage their careers.
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