The digital platform for U.S. medical professionals, Doximity (NYSE: DOCS) crashed by more than 20% in trading on Wednesday after the company announced a plan to slash 10% of its workforce. More disappointingly, the company also lowered its FY24 guidance and now expects to generate revenues in the range of $452 million and $468 million as compared to its prior guidance between $500 million and $506 million and below consensus estimates of $501.63 million. In FY24, DOCS has forecasted adjusted EBITDA between $193 million and $209 million, as compared to its prior outlook in the range of $216 million to $222 million.
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When it comes to fiscal Q2 outlook, Doximity has projected revenues between $108.5 million and $109.5 million while adjusted EBITDA is likely to be in the range of $44 million to $45 million.
The company reported adjusted earnings of $0.19 per share in the fiscal first quarter as compared to $0.14 in the same period last year and above Street estimates of $0.14 per share. The company generated Q1 revenues of $108.5 million, up by 20% year-over-year and beating consensus estimates of $107 million.
The lowered guidance prompted top-rated Needham analyst Scott Berg to downgrade the stock to a Hold from a Buy. Berg stated that this was Doximity’s fifth guidance cut in a row as a result of macro concerns and a shift in marketing priorities.
While the analyst approved of DOCS’ new digital self-service go-to-market (GTM) strategy, Berg added that the implementation of this strategy could take longer than expected and could hurt the company’s sales growth over the short term.
Overall, Wall Street analysts are sidelined about DOCS stock with a Hold consensus rating based on four Buys, seven Holds, and two Sells.
