“Demand…Will Continue to Rise”: Doximity Stock (NYSE:DOCS) Slips Despite Analyst Love

Normally, positive word from an analyst can send a stock on an upward tilt. Hearing positive reports from someone who has considered a stock’s pluses and minuses closely can offer confidence to investors. That is not how things went for cloud medical provider Doximity (DOCS) today, as shares slipped fractionally in Monday afternoon’s trading despite a positive report from BTIG.

BTIG analyst David Larsen pointed out that there are still some macroeconomic headwinds going on, particularly from the biopharmaceutical sector. That is not great news, of course, but Larsen believes these headwinds are actually a bit overdone. Granted, there are risks coming from “…tariffs, ongoing drug pricing reform, the Inflation Reduction Act, and Medicare Rate pressures….” But, Larsen notes, there is likely to continue to be demand for “…high-quality, precise [software as a service] commercialization efforts….”

Larsen further looks for the order on most-favored-nation trade status to not be particularly widely used, and also noted that Doximity’s fourth-quarter earnings report, just recently released, provides plenty of positive insight as well.

Speaking of that Fourth Quarter Report

That fourth quarter report, brought out just a few weeks ago, really does underscore Larsen’s suggestions that any concern about macroeconomic issues are likely overdone here. After all, the report noted, free cash flow improved more than 50% against the same time a year ago, so clearly, there is demand, and the demand is pretty brisk to generate that kind of gain.

However, it is worth pointing out that even Doximity’s own guidance looks for a significant decline in revenue growth for its new fiscal year, suggesting that even it believes a slump is in the cards. Still, with Doximity’s rather pessimistic forecast landing in the midpoint of the range, there is some reason for positive thinking here.

Is Doximity Stock a Good Buy?

Turning to Wall Street, analysts have a Moderate Buy consensus rating on DOCS stock based on six Buys and 10 Holds assigned in the past three months, as indicated by the graphic below. After a 88.46% rally in its share price over the past year, the average DOCS price target of $60 per share implies 16.32% upside potential.

See more DOCS analyst ratings

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