Why Doximity Stock Plunged Today
Shares of the leading digital healthcare platform for medical professionals in the U.S., Doximity (NYSE: DOCS), were down 24% as of 11 a.m. ET on Thursday after the company reported underwhelming fourth-quarter earnings. Despite offering conservative Q4 guidance at its last earnings call, Doximity barely snuck past sales expectations from Wall Street and came up shy on earnings.
For the quarter, sales rose 5%, and free cash flow (FCF) increased 11%, while the full year showed increases of 13% and 19% in revenue and FCF, respectively. Perhaps the biggest disappointment from today's report was management's full-year revenue growth guidance of only 3% to 5% in 2027 -- paired with a declining adjusted EBITDA margin.
As rough as Doximity's results are on the surface -- it is a core holding for me -- I don't think the company is "doomed" by any means, operationally speaking. Rather, management openly admitted that it is increasing spending on AI-powered products (which will weigh on profitability) at a time when the healthcare professional advertising market is already soft amid broader macroeconomic challenges.
Source Fool.com
