Key Stats for DOCS Stock
- Price Change for DOCS stock: -16.78%
- DOCS Share Price as of Feb. 6: $27.73
- 52-Week High: $85.21
- DOCS Stock Price Target: $52
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What Happened?
Doximity (DOCS) stock sold off sharply this week after the company reported fiscal third‑quarter results and issued cautious guidance. Revenue for the quarter ended December 31, 2025, grew to about $185 million and beat analyst expectations, but management projected much slower growth ahead.
Guidance for the current quarter calls for revenue of roughly $143 million to $144 million, so growth could decelerate to low single digits.
Investors also reacted to rising costs tied to Doximity’s AI products, which pressured margins even though profitability remains high.
Non‑GAAP gross margin slipped from about 93% a year ago to around 91% as AI infrastructure and product investments ramped up.
The company highlighted strong adoption of tools like DocsGPT, Doximity Dialer, and Doximity Scribe, but said these offerings require heavier upfront spending.
Because pharmaceutical clients are being cautious with digital marketing budgets, Doximity now expects a slower start to calendar 2026 than previously hoped.
At the same time, management authorized a new $500 million share repurchase program, building on recent heavy buybacks to support the stock.
The combination of softer guidance, higher AI‑related expenses, and a large buyback plan explains why the stock is down sharply but still drawing attention from long‑term investors.
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What the Market Is Telling Us About DOCS Stock
The steep post‑earnings drop suggests investors are questioning whether Doximity can sustain its historically high growth and margins.
DOCS has delivered mid‑teens revenue growth and adjusted EBITDA margins around 60%, so the latest guidance reset feels like a clear step down.
Management still expects to maintain at least 50% adjusted EBITDA margins annually, which would keep DOCS among the more profitable software‑like healthcare platforms.
The company holds a strong net cash position of several hundred million dollars, and it generates healthy operating cash flow with limited balance sheet risk.
This cash cushion supports the $500 million buyback, so shareholders could see the share count fall if the program is executed aggressively at current prices.
However, dependence on pharmaceutical marketing budgets creates a macro and policy headwind because drug makers can pause or reallocate spending quickly.
Analysts also highlight regulatory uncertainty, rising stock‑based compensation, and competitive telehealth offerings as additional headwinds that could cap valuation multiples.
Investors who think management can reignite double‑digit growth while holding margins near 50% may see the current pullback as an opportunity, but others could view the stock as fairly valued given the new guidance.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
