Street Calls of the Week
Investing.com -- JPMorgan downgraded Doximity to Underweight from Neutral given a limited visibility on digital pharma advertising trends and a valuation premium well above peers.
The brokerage said Doximity remains a key healthcare networking and advertising platform, with more than 80% of U.S. physicians and 60% of nurse practitioners and physician assistants on its platform.
Over 90% of revenue comes from marketing solutions for pharmaceutical and health system clients, with hiring and telehealth making up the rest.
JPMorgan noted that while Doximity continues to report high margins which is about 91% gross and 55% EBITDA in its latest quarter and nearly 50% free cash flow margin, growth is constrained by uncertain pharma ad budgets.
The company recently withdrew its long-term $1 billion revenue target for FY28 due to macro uncertainty, though it continues to guide for revenue growth roughly double industry levels.
The brokerage said Doximity’s financial profile justifies some premium, but its CY26 enterprise value-to-EBITDA multiple of 36 is a steep premium to the 23 median for vertical SaaS peers. It kept its price target at $62.
“Possible risks to digital pharma ad budgets, high level of competition and DOCS’ current valuation (CY26E EV/EBITDA of 36x reflecting a major premium to the group) warrant rating downgrade,” analysts said.