Evercore ISI upgrades Doximity stock to Outperform on growth potential

Investing.com - Evercore ISI upgraded Doximity Inc (NYSE:DOCS) from In Line to Outperform on Wednesday, while raising its price target to $70.00 from $50.00. According to InvestingPro data, the company currently trades above its Fair Value, though it maintains impressive gross profit margins of 90.2% and has delivered a remarkable 125% return over the past year.

The upgrade reflects Evercore’s view that Doximity has set conservative fiscal year 2026 guidance. The firm projects the company’s PoC/Formulary business will grow to more than $140 million in FY26, compared to approximately 100% growth in FY25. This outlook aligns with the company’s strong financial health, earning a "GREAT" overall score from InvestingPro’s comprehensive analysis, which includes 13 additional key insights available to subscribers.

Evercore anticipates Doximity’s pharmaceutical revenue will reach approximately $535 million in FY26, supported by continued strong GLP-1-related spending estimated to contribute about $60 million to revenue, representing double-digit year-over-year growth.

The research firm’s current FY26 revenue estimate of $630 million sits at the high end of management’s guidance range of $619-631 million, with Evercore suggesting potential for 5% or more upside with continued market stability.

On profitability, Evercore highlighted Doximity’s "enviable model with very high incremental EBITDA margins," noting that revenue outperformance could create more than $25 million of upside to EBITDA from its current estimate of $340 million in FY26. The company’s strong profitability metrics are evident in its return on invested capital of 19% and current EBITDA of $236 million. For a deeper understanding of Doximity’s financial position, investors can access the detailed Pro Research Report available on InvestingPro, which provides comprehensive analysis of over 1,400 US stocks.

In other recent news, Doximity Inc reported its fourth-quarter results, which exceeded consensus expectations, although its fiscal year 2026 guidance fell short of analyst predictions. Truist Securities responded by lowering Doximity’s price target from $58 to $52 while maintaining a Hold rating, citing macroeconomic uncertainties and challenging year-over-year comparisons. Meanwhile, BTIG upgraded Doximity stock from Neutral to Buy, setting a new price target of $80, driven by strong demand for SaaS solutions in the bio-pharma industry. Goldman Sachs reduced its price target for Doximity to $50, maintaining a Neutral rating and forecasting a stabilization of revenue growth at around 10-11% through fiscal year 2029. Wells Fargo (NYSE:WFC) reiterated an Equal Weight rating with a $55 price target, noting the uncertain pharmaceutical advertising market. Raymond (NSE:RYMD) James highlighted positive trends for Doximity in healthcare provider engagement, emphasizing the potential efficiency gains from AI in content creation. Doximity’s strong financial position, with approximately $900 million in cash and no debt, was also noted, alongside its high EBITDA margins. These developments reflect a mix of cautious optimism and challenges for Doximity amid a complex market environment.

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