Key Stats
- Current Price: $23 (May 13, 2026)
- Full-Year Revenue (FY2026): $645M, up 13% YoY
- Full-Year Adjusted EBITDA: $358M, 55% margin, up 14% YoY
- Q4 Revenue: $145M, up 5% YoY
- Q4 Adjusted EBITDA: $66M, 45% margin (vs. 50% prior year)
- Q4 Adjusted EPS: $0.26 (vs. $0.38 prior year)
- Full-Year Free Cash Flow: $317M, up 19% YoY
- FY2027 Revenue Guidance: $664M to $676M (~4% growth at midpoint)
- FY2027 Adjusted EBITDA Guidance: $323M to $335M (~49% margin)
- TIKR Model Price Target: $35 | Implied Upside: ~51%
Doximity Stock Beats Q4 Estimates, But Margin Compression and a Slower Growth Outlook Raise Real Questions
Doximity stock (DOCS) delivered Q4 revenue of $145M, up 5% year-over-year and ahead of Street estimates, while adjusted EPS of $0.26 missed estimates of $0.28 as AI compute costs weighed on profitability.
For the full fiscal year ended March 31, 2026, revenue reached $645M, up 13% year-over-year, according to CEO Jeff Tangney on the Q4 earnings call.
Full-year adjusted EBITDA was $358M, up 14% year-over-year, with a 55% margin matching the prior year, while full-year free cash flow grew 19% to $317M, according to CFO Perry Gold on the Q4 earnings call.
The primary growth driver was engagement acceleration: quarterly active prescribers on the workflow platform reached over 800,000, up roughly 30% year-over-year, the largest jump Doximity has recorded.
Nearly half of those active prescribers used AI tools in Q4, and AI Search and Scribe active users tripled in the nine months following the $63M Pathway AI acquisition.
Doximity launched its commercial AI Search product at its Annual Pharma Client Summit in New York in late April 2026, targeting pharma brands’ paid search budgets with a physician-intent signal, and has already closed its first deals with top-20 pharma manufacturers.
Management guided FY2027 revenue to $664M to $676M, representing roughly 4% growth at the midpoint, a significant deceleration from FY2026’s 13%, citing soft HCP digital pharma ad demand, policy uncertainty, and limited budget visibility.
FY2027 adjusted EBITDA guidance of $323M to $335M implies a roughly 49% margin, down from 55% in FY2026, as AI compute investment, PeerCheck, and new brand marketing spend weigh on near-term profitability, according to Gold on the Q4 earnings call.
Doximity repurchased $432M of shares in FY2026, up from $116M in FY2025, and ended the year with $493M remaining in its repurchase authorization.
The company closed the year with a net revenue retention rate of 109% on a trailing twelve-month basis, and top-20 customer NRR of 114%.
Doximity announced two management changes: Matt Sonefeldt, formerly of LinkedIn, Atlassian, and DocuSign, joined as CFO effective early June 2026, and Dr. Steve Zatz, former President and CEO of WebMD/Medscape, was named President.
Financials: Margin Compression Deepens as AI Investment Begins
Doximity stock’s income statement tells a clear story: years of margin expansion have given way to controlled compression as AI compute costs rise faster than revenue.
Gross margin held in a narrow band across the eight quarters visible in the income statement, ranging from 89% to 92%, with no single quarter showing a decisive break in either direction.
In Q4 FY2026, non-GAAP gross margin was 89%, down from 91% in the prior year period, driven by rising AI compute costs, according to Gold on the Q4 earnings call.
Full-year non-GAAP gross margin was 91%, compared to 92% in FY2025.
Operating margin showed more movement: it expanded steadily from 36% in Q1 FY2024 to 48% at the FY2024 peak, then pulled back to 35% in Q1 FY2025 before recovering to 39% by Q3 FY2025.
Operating income growth turned negative in Q4 FY2025, declining 10% year-over-year per the income statement, the first red mark in the multi-quarter trend.
Management has guided for adjusted EBITDA margins in the high 40s for FY2027, absorbing higher AI compute, PeerCheck investment, and a new brand marketing push, according to Gold on the Q4 earnings call.
What Does the Valuation Model Say?
The TIKR model prices Doximity stock at $35, implying roughly 51% upside from the current price of $23.
The mid-case assumes a revenue CAGR of 4.6% and a net income margin of 45%, with P/E change assumed flat at 0.0% annually over the forecast horizon, meaning the model bets the stock re-rates only through earnings growth, not multiple expansion.
That framing matters because Doximity stock has seen its P/E compress at a (29.2)% three-year historical CAGR per the model, and the mid-case assumes that headwind stops without assuming a reversal.
This earnings report does not cleanly strengthen or weaken the model’s base: the FY2026 revenue print of $645M is consistent with the growth trajectory the model requires, but the FY2027 guidance midpoint of $670M implies growth well below the 4.6% mid-case CAGR in the near term.
The investment case for Doximity stock remains intact structurally, but the near-term path to the $35 target runs entirely through AI monetization delivering meaningful revenue in the second half of FY2027 and the multiple compression trend arresting.
The question Doximity stock now forces is whether AI Search monetization can close the gap between 4% near-term guidance and the engagement trajectory that has every other operating metric accelerating.
What Has to Go Right
- AI Search commercial ramp materializes in the fiscal back half: management closed first deals with top-20 pharma manufacturers and expects more notable revenue contribution beginning in Q3 FY2027, according to Tangney on the Q4 earnings call.
- Workflow engagement sustaining 30% year-over-year growth in active prescribers, well above the high-single-digit rates seen a year ago, validates that the physician-first investment is translating into platform depth.
- Health system AI suite reaches 140 enterprise clients in two quarters, a pace management compared favorably to the two-year timeline it took Dialer to hit the same milestone, per Tangney on the Q4 earnings call.
- The Aledade partnership extending the clinical AI suite to thousands of independent primary care practices broadens the distribution footprint beyond large hospital systems.
What Could Still Go Wrong
- FY2027 revenue guidance of $664M to $676M implies roughly 4% growth at the midpoint, and management acknowledged that only 65% of subscription-based revenue is booked, in line with the three-year average but with more modest growth baked in.
- AI Search faces med-legal review timelines similar to the vertical video cycle three years ago, meaning material revenue recognition shifts to Q3 and Q4 FY2027 at the earliest, according to Gold on the Q4 earnings call.
- Adjusted EBITDA margin guided to roughly 49% in FY2027, down from 55% in FY2026, as AI compute, PeerCheck, and brand marketing spend increase in a year where top-line growth is modest.
- HCP digital pharma ad market growth is expected to be at or below 5% for the year, with shorter-term spend commitments the norm and incremental budget limited, per Gold on the Q4 earnings call.
Should You Invest in Doximity, Inc.?
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