Doximity (DOCS) Stock Tumbles on Light Forecast, Analysts Slash Price Target but Remain Constructive on Valuation

May 18, 2022 5:58 AM EDT
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Price: $41.50 +6.55%

Rating Summary:
    10 Buy, 2 Hold, 1 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 8 | Down: 12 | New: 20
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Shares of Doximity (NYSE: DOCS) are down nearly 17% in premarket trading Wednesday after the company issued a weaker-than-expected Q1 revenue forecast.

The company reported FQ4 adjusted EPS of 21c, topping the consensus estimates of 14c per share. Revenue in the fourth quarter stood at $93.7 million, above the expected $90.1 million. Adjusted EBITDA stood at $39,400 in the period, while analysts were looking for $34.9 million

For the first quarter, Doximity expects revenue in the range of $88.6 million to $89.6 million, missing the estimated $96.7 million. Adjusted EBITDA is expected to range between $28.6 million and $29.6 million, compared to the expected $37.3 million.

For FY 2023, the company expects revenue in the range of $454 million to $458 million, topping the analyst expectations of $451.6 million.

Meanwhile, Doximity also approved a new share repurchase plan of $70 million.

Jefferies analyst Glen Santangelo slashed the price target to $46.00 per share from $78.00 to reflect “disappointing” results. Still, the analyst reiterated a Buy rating as valuation is “too attractive to ignore.”

Morgan Stanley analyst Craig Hettenbach also cut the price target to $35.00 per share from $55.00 as a light forecast will overshadow other positive developments.

By Senad Karaahmetovic

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Morgan Stanley, Jefferies & Co, Senad Karaahmetovic