Goldman cuts Doximity stock price target to $50, maintains neutral

On Wednesday, Goldman Sachs adjusted its outlook on Doximity Inc (NYSE: NYSE:DOCS), reducing the firm’s price target on the stock to $50, a decrease from the previous target of $80, while maintaining a Neutral rating on the shares. The stock currently trades at $53, with InvestingPro data showing six analysts have recently revised their earnings expectations downward. The adjustment follows a detailed analysis of the company’s potential performance over the next several years.

Goldman Sachs predicts that Doximity’s revenue growth rate will stabilize at around 10-11% through fiscal year 2029, compared to a 20% year-over-year increase in fiscal year 2025 and a 14% increase in fiscal year 2024. This projection comes as the company maintains impressive gross profit margins of 90.2%, according to InvestingPro data. The forecast is based on the expected trajectory of growth in the end-market and the estimated pace of market share gains, which is projected to be around 100 basis points annually going forward.

The investment firm also anticipates that Doximity will experience relatively flat adjusted EBITDA margins in fiscal year 2026 due to lower year-over-year gross margins and increased investments in research and development. However, beyond that year, Goldman Sachs expects an annual adjusted EBITDA margin expansion of between 90 and 110 basis points from fiscal year 2026 to 2029.

In terms of valuation, Doximity’s shares are currently trading at 28.5 times calendar year 2025 estimated EV/EBITDA and 25.2 times calendar year 2026 estimated EV/EBITDA. These multiples are lower than the peer group averages of 36.0 and 34.0 times, respectively. The revised price target of $50 reflects these considerations, as stated by the Goldman Sachs analyst in their commentary.

The analyst’s comments included a comprehensive view of Doximity’s financial outlook, stating, "Overall, we see Doximity’s top-line growth rate settling into a narrower range of 10-11% through FY29 vs. FY25 (+20% YoY) and FY24 (+14% YoY), reflecting the trajectory of end-market growth and pace of market share capture (estimated at 100bps per year on a go-forward basis). As for profitability, we forecast relatively flat adjusted EBITDA margins in FY26 on lower YoY gross margins and investments in R&D. Beyond that point, we model 90-110bps in annual adjusted EBITDA margin expansion in FY26-FY29. As such, in this context, we think valuation considerations become increasingly important as DOCS shares currently trade at 28.5x CY25E EV/EBITDA and 25.2x CY26E EV/EBITDA vs. peers at 36.0x and 34.0x, respectively. We lower our 12-month price target to $50 and maintain our Neutral rating."

In other recent news, Doximity Inc. reported strong fourth-quarter earnings for fiscal year 2025, surpassing Wall Street expectations with an earnings per share (EPS) of $0.38, compared to the forecasted $0.27, and revenue of $138.3 million, exceeding the anticipated $134.03 million. Despite these positive results, the company provided a cautious outlook for fiscal year 2026 due to macroeconomic uncertainties. Truist Securities adjusted its price target for Doximity from $58 to $52, maintaining a Hold rating, citing the company’s conservative fiscal year 2026 guidance. Raymond (NSE:RYMD) James also lowered its price target from $83 to $65, while maintaining an Outperform rating, noting the company’s strong fundamentals but acknowledging reduced growth momentum. Evercore ISI cut its price target to $50 from $60, emphasizing potential policy uncertainty affecting revenue outlook. Doximity’s management remains optimistic about future growth, with a focus on AI investments and new product developments. The company’s backlog growth and client interest in AI-powered solutions were highlighted as positive indicators for future performance.

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