Doximity (DOCS – Research Report), the Healthcare sector company, was revisited by a Wall Street analyst yesterday. Analyst Richard Close from Canaccord Genuity maintained a Buy rating on the stock and has a $34.00 price target.
Richard Close’s Buy rating for Doximity’s stock is anchored on a few key observations and projections. Despite the company’s fourth-quarter revenue guidance falling short of estimates, Close emphasizes the strong sales season and the company’s ability to grow at rates surpassing the expected market growth of 5-7% in 2024. Additionally, Doximity’s net revenue retention showed a positive sequential uptick, reversing a previous downward trend, which signals robust client spend retention and potential for recurring revenue growth. Close also notes management’s conservative stance regarding the upcoming fiscal year’s guidance amidst economic uncertainty, but sees this as an opportunity for future upward estimate revisions, given the company’s increased backlog and visibility.
Among the bullish points Close highlights are the company’s significant net revenue retention increase, impressive revenue growth of 17.4%, and record margins that surpass estimates. These financial metrics not only demonstrate Doximity’s strong operational performance but also its efficiency and scalability. The analyst’s maintained price target of $34 is based on a discount to the peer group average, reflecting the current economic uncertainty and budgetary concerns within the pharmaceutical industry. However, Close’s report suggests that the anticipated launch of Doximity’s full-access self-service portal, with advanced features like an AI brainstorm bot, could serve as a catalyst for further adoption and growth, underpinning the Buy rating.
Close covers the Healthcare sector, focusing on stocks such as R1 RCM, Premier, and Evolent Health. According to TipRanks, Close has an average return of 10.1% and a 52.66% success rate on recommended stocks.
In another report released today, Robert W. Baird also maintained a Buy rating on the stock with a $31.00 price target.
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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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