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Investing.com - Raymond James upgraded Doximity Inc (NYSE:DOCS) from Outperform to Strong Buy on Friday, while lowering its price target to $65.00 from $75.00. The stock is currently trading at $46.42, near its 52-week low of $46.04, with InvestingPro data showing it’s trading below its calculated Fair Value.
The upgrade follows what Raymond James describes as a "significant dislocation" in Doximity shares after the company’s fiscal second-quarter results, with the current valuation at 25 times free cash flow appearing "too compelling to ignore." InvestingPro data confirms this sentiment, with technical indicators suggesting the stock is in oversold territory.
Raymond James believes Doximity’s long-term growth visibility and durability are improving, noting the company has consistently grown at two to three times the rate of digital budgets in its market. The firm points to ramping workflow adoption, multi-product expansion, and client portal benefits as factors suggesting these market share gains are "durable in nature." This aligns with Doximity’s impressive 20.21% revenue growth over the last twelve months and remarkable 90.2% gross profit margin.
The investment firm also identified potential longer-term opportunities from AI monetization and possible direct-to-consumer to healthcare provider shifts that could help sustain above-market growth, though it has assumed little of this potential in its current model.
Raymond James highlighted that Doximity possesses what it calls the "3 Ms of a core long-term holding" – moat, margin, and management team – and believes the recent pullback that has left shares trading at a discount to the vertical software group is "too great to ignore."
In other recent news, Doximity Inc. reported its Q2 FY2026 earnings, surpassing Wall Street expectations. The company achieved an earnings per share (EPS) of $0.45, exceeding the forecasted $0.38, which represents an 18.42% surprise. Revenue for the quarter reached $168.5 million, surpassing the anticipated $157.1 million. These results indicate robust financial performance for Doximity. Despite the positive earnings and revenue figures, the company’s stock experienced a decline in after-hours trading. This reaction was attributed to investor concerns regarding future guidance and prevailing market conditions. The earnings report highlights Doximity’s ability to outperform analyst projections.
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