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On Monday, BTIG analysts upgraded Doximity Inc (NYSE: NYSE:DOCS) stock from Neutral to Buy, setting a new price target of $80, representing a significant upside from the current price of $52.09. According to InvestingPro data, the stock has shown strong momentum with an impressive 88% return over the past year. The analysts expressed confidence in the company’s potential, highlighting the growing demand for high-quality software-as-a-service (SaaS) solutions in the bio-pharma industry despite macroeconomic uncertainties.
The analysts noted that while there are ongoing challenges in the bio-pharma sector, such as potential tariffs and drug pricing reforms, the demand for precise SaaS commercialization efforts is expected to continue rising. They referenced Veeva’s recent strong commercial revenue growth as an indicator of this trend. Doximity’s own revenue growth remains robust at approximately 20% year-over-year, with an impressive gross profit margin of 90.2%.
Doximity’s recent financial guidance was described as conservative, with analysts pointing to a trailing twelve-month net revenue retention rate of approximately 119%, which they view as high. They anticipate that the U.S. will reach a long-term trade agreement with China and do not expect a 25% prescription tariff to be implemented.
The analysts also expressed skepticism regarding the permanence of the Most Favored Nation order and noted a recovery in pharma research and development growth in the latter half of 2024. They expect this recovery to continue into 2025, supported by a favorable pace of new drug launches.
Doximity’s financial position was highlighted, with approximately $900 million in cash, no debt, and strong gross and EBITDA margins. The self-service portal, which offers a high return on investment for clients, was also seen as a positive factor for the company’s growth prospects. InvestingPro analysis confirms the company’s strong financial health with a "GREAT" overall score, highlighting its exceptional liquidity with a current ratio of 6.97. For deeper insights into Doximity’s valuation and growth potential, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
In other recent news, Doximity Inc’s financial outlook has garnered attention from several analyst firms. The company released its fourth-quarter results, exceeding consensus expectations, but its fiscal year 2026 guidance fell short, leading Truist Securities to lower its price target from $58 to $52 while maintaining a Hold rating. Similarly, Raymond (NSE:RYMD) James adjusted its price target for Doximity from $83 to $65, citing a more modest outperformance in the fourth quarter and a cautious fiscal year 2026 outlook, yet still recommending the stock with an Outperform rating. Evercore ISI also revised its price target to $50 from $60, maintaining an "In Line" rating due to potential policy uncertainties affecting revenue projections for fiscal year 2026.
Goldman Sachs has maintained a Neutral rating on Doximity, reducing its price target from $80 to $50. The firm anticipates Doximity’s revenue growth to stabilize at 10-11% through fiscal year 2029, with adjusted EBITDA margins remaining flat in fiscal year 2026 before expanding annually by 90-110 basis points from 2026 to 2029. Furthermore, Raymond James highlighted positive trends for Doximity, noting advancements in healthcare provider engagement and the potential efficiency gains from artificial intelligence in content creation. The report suggests that AI could significantly reduce content costs and accelerate production, benefiting Doximity’s operations.
Despite these mixed financial results and outlooks, Doximity continues to focus on research and development, particularly in artificial intelligence, which could open new revenue streams. The company aims to maintain its competitive edge through initiatives such as client portals and new product introductions. While analysts have adjusted their financial models and price targets, they recognize Doximity’s strengths in the market, even as the company navigates macroeconomic uncertainties and policy changes.
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