Jefferies raises Doximity stock price target to $88, maintains Buy

On Thursday, Jefferies analyst Glen Santangelo increased the price target for Doximity Inc (NYSE:DOCS) to $88 from $64, while continuing to recommend the stock as a Buy. Santangelo noted that the stock has experienced a significant rise, approximately 30%, following the company’s remarkable third-quarter results. The stock’s momentum is evident in its impressive 159% return over the past year. According to InvestingPro data, the company currently trades at a P/E ratio of 69.3, and while current analysis suggests the stock is slightly overvalued, 12 analysts have recently revised their earnings expectations upward for the upcoming period.

The analyst’s optimism is rooted in Doximity’s impressive combination of robust growth and profitability. In the third quarter, Doximity reported a growth rate exceeding 25% and an EBITDA margin above 60%. These strong financial metrics, according to Santangelo, justify a premium valuation for the company’s shares. InvestingPro data reveals an outstanding gross profit margin of 90.19% and healthy revenue growth of 17.47% over the last twelve months. The company’s financial health score is rated as "GREAT" by InvestingPro analysts.

The upward revision in the price target is a reflection of the analyst’s revised estimates and a belief in the company’s continued growth trajectory. Doximity, which operates a professional network for physicians, has been able to capitalize on the increasing digitalization of healthcare and the need for robust communication platforms within the industry. The company maintains a strong financial position with a current ratio of 8.74, indicating excellent liquidity, and operates with minimal debt, as revealed in the comprehensive InvestingPro Research Report, available for over 1,400 US stocks.

Santangelo’s analysis suggests that despite the stock’s recent gains, there is still room for appreciation. The new price target of $88 suggests a confidence in Doximity’s market position and its ability to sustain its growth and profitability moving forward.

Investors have responded well to the company’s financial performance, as evidenced by the stock’s rise after the third-quarter results were released. Doximity’s ability to maintain a high EBITDA margin while growing at an impressive rate has set it apart from its peers and supported the analyst’s positive outlook on the stock.

In other recent news, Doximity Inc has been the subject of several analyst upgrades following its robust fiscal third-quarter performance. Mizuho (NYSE:MFG) Securities raised the company’s stock price target to $65, acknowledging the company’s revenue exceeding expectations for the third consecutive quarter. Piper Sandler, too, upgraded Doximity’s stock rating from Neutral to Overweight, raising the price target to $78, citing the company’s impressive revenue growth and promising bookings momentum.

KeyBanc Capital Markets reiterated its Overweight rating and $65.00 price target on Doximity, following the company’s significant top- and bottom-line growth. Needham maintained a Buy rating on Doximity and increased its price target to $82.00, pointing to the company’s significant upselling and unprecedented adjusted EBITDA margin. Canaccord Genuity adjusted its price target for Doximity to $71.00, praising the company’s market share gains and profitability improvements.

These recent developments reflect the company’s strong financial performance and promising outlook. Analysts from different firms have shown confidence in Doximity’s growth prospects, acknowledging the company’s successful execution and strategic enhancements to its platform. However, these projections are based on the company’s recent performance and market conditions, and investors should consider these factors when making investment decisions.

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