Doximity: Strong Performance Amidst Cautious Outlook Warrants Hold Rating

Analyst Craig Hettenbach from Morgan Stanley maintained a Hold rating on Doximity (DOCS – Research Report) and keeping the price target at $60.00.

Craig Hettenbach has given his Hold rating due to a combination of factors that reflect both the strengths and challenges faced by Doximity. The company reported strong financial performance in the recent quarter, with revenue and EBITDA exceeding expectations by 3.5% and 8%, respectively. This growth was driven by increased adoption of multi-module offerings and significant contributions from their top customers. Additionally, Doximity’s solid balance sheet, with substantial cash reserves and no debt, provides financial flexibility.
However, Hettenbach notes that despite these positive results, Doximity’s guidance for the upcoming quarter and fiscal year fell slightly below market expectations. This conservative outlook, coupled with a high EV/EBITDA multiple, suggests limited immediate upside potential. Furthermore, macroeconomic uncertainties and a cautious outlook on the digital pharma marketing growth rate contribute to the Hold rating. While the company remains optimistic about future integrated offerings and potential upsell opportunities, these factors collectively support a more cautious investment stance at this time.

According to TipRanks, Hettenbach is a 4-star analyst with an average return of 4.8% and a 54.90% success rate.

In another report released today, Wells Fargo also maintained a Hold rating on the stock with a $55.00 price target.