Doximity, the online platform for medical professionals, experienced a significant decline in stock value following the release of its sales forecast for the sixth consecutive quarter. The company reported earnings of 19 cents per share and sales of $108.5 million for its fiscal first quarter, surpassing analysts’ expectations tracked by FactSet.
Exciting news also emerged as Doximity announced its first enterprise client deal for DocsGPT, an artificial intelligence tool designed to assist doctors with paperwork. This development indicates the company’s commitment to innovation and technological advancements in the healthcare industry.
However, despite these positive developments, management had to revise its revenue forecast for fiscal 2024 downwards. Initially projecting $500 million to $506 million, the updated forecast now predicts revenue between $452 million and $468 million for the twelve months ending in March 2024.
Looking ahead to the current period, Doximity expects revenue in the range of $108.5 million to $109.5 million for the second fiscal quarter. This projection falls short of Wall Street’s estimate of $121.3 million. Unfortunately, this marks the sixth consecutive quarter in which management’s guidance has failed to meet expectations, according to FactSet data.
Overall, Doximity continues to face challenges as pharmaceutical companies appear to be slowing down in their transition towards digitization. The stock market’s response to the lower revenue forecast reflects investors’ concerns about the company’s growth prospects moving forward. Despite these obstacles, Doximity remains dedicated to providing valuable services and innovative solutions for medical professionals in an ever-evolving digital landscape.
Doximity Sees Slowdown in Pharma Companies’ Digital Shift
Introduction
Doximity, a platform that enables medical professionals to collaborate and coordinate on patient care, has reported a slowdown in the shift to digital information handling by pharmaceutical companies. The company attributes this trend to post-Covid-19 travel impacting the budgets of these companies.
Market Reaction
In response to this announcement, shares of Doximity experienced a significant decline of 23% in early trading, reaching a price of $25.15.
Analyst Downgrades
Guggenheim’s analyst, Sandy Draper, downgraded Doximity’s stock from Buy to Neutral due to uncertainties surrounding its growth. Draper believes that there is no strong reason to “buy the dip” and anticipates that the shares will face pressure as investors potentially apply a “credibility discount.”
Likewise, Scott Berg from Needham also adjusted his rating on the stock from Buy to Hold until demand becomes more predictable.
Withdrawal of Price Targets
As part of their respective downgrades, both Berg and Draper have withdrawn their price targets for Doximity’s stock. Berg’s previous forecast had projected a rise to $45, while Draper’s outlook had suggested a potential reach of $37.
