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Piper Sandler has adjusted its outlook on Doximity Inc (NYSE: NYSE:DOCS), a professional medical network, by increasing the price target to $31.00 from the previous $28.00, while maintaining a Neutral rating on the stock.
The revision followed Doximity's announcement on Thursday, where the company reported first-quarter revenues of $126.7 million, surpassing the high end of their guidance by $6.2 million. Additionally, Doximity's adjusted EBITDA for the quarter was $65.9 million, which exceeded expectations by $9.9 million.
The company's recent performance has been bolstered by a significant beat and raise, with positive commentary about network growth and engagement. Piper Sandler noted that Doximity's workflow product suite could enable the company to capture incremental wallet share, although potentially less than the 500 basis points initially anticipated.
Despite this, the firm's revised full-year 2025 guidance suggests a conservative stance, with an implied deceleration in revenue growth over the next three quarters.
Doximity's guidance also indicates that margins might decrease even as revenues grow, which is worth noting given that the first quarter faced the toughest comparison of the year.
Doximity has been making headlines with its financial results and analysts' reviews. The company recently reported a strong financial performance, surpassing its fourth-quarter revenue guidance with $118 million and a 13% year-on-year growth, culminating in $475 million for fiscal year 2024.
The company's adjusted EBITDA margin stood at 48%, with $56 million in Q4. Furthermore, Doximity announced a new $500 million share buyback program and forecasts Q1 2025 revenue between $119.5 million and $120.5 million, and $506 million to $518 million for the full fiscal year.
In terms of analysts' views, Evercore ISI increased the price target for Doximity from $29.00 to $34.00, maintaining an In Line rating, following the company's robust financial results. On the other hand, Wells Fargo downgraded Doximity's shares and reduced the price target to $19.00, citing concerns over the company's growth trajectory.
Barclays maintained an Equalweight rating with a steady price target of $31.00, while Truist Securities increased the stock's price target to $31.00 from the previous $29.00, maintaining a Hold rating.
InvestingPro Insights
As Doximity Inc (NYSE: DOCS) continues to show robust financial performance, a closer look through InvestingPro's real-time data and expert tips reveals some additional layers to the company's valuation and stock behavior. The company's market capitalization stands at a substantial $6.77 billion, reflecting a significant presence in the market. Despite a relatively high P/E ratio of 42.74, which suggests a premium on earnings, the adjusted P/E ratio for the last twelve months as of Q1 2023 is slightly lower at 40.26, indicating a slight moderation in valuation.
The gross profit margin for the same period is particularly impressive at 89.65%, showcasing the company's ability to maintain profitability. This is in line with one of the InvestingPro Tips highlighting Doximity's impressive gross profit margins. Additionally, an InvestingPro Tip points out that the company holds more cash than debt on its balance sheet, which is a reassuring sign for investors concerned about the company's financial health and its ability to sustain growth without relying heavily on external financing.
Furthermore, Doximity's stock has experienced significant returns, with a 36.98% return over the last week and a 49.45% return over the past year, a performance that investors should consider when assessing the stock's potential for continued growth. For those interested in deeper analysis, InvestingPro offers additional tips on Doximity, which can be found at https://www.investing.com/pro/DOCS.
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