Doximity (DOCS) could be a solid addition to your portfolio given a notable revision in the company's earnings estimates. While the stock has been gaining lately, the trend might continue since its earnings outlook is still improving.
The upward trend in estimate revisions for this medical social networking site reflects growing optimism of analysts on its earnings prospects, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. This insight is at the core of our stock rating tool -- the Zacks Rank.
The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.
For Doximity, there has been strong agreement among the covering analysts in raising earnings estimates, which has helped push consensus estimates considerably higher for the next quarter and full year.
The earnings estimate of $0.31 per share for the current quarter represents a change of +6.9% from the number reported a year ago.
Over the last 30 days, the Zacks Consensus Estimate for Doximity has increased 11.56% because four estimates have moved higher compared to no negative revisions.
For the full year, the company is expected to earn $1.10 per share, representing a year-over-year change of +15.79%.
In terms of estimate revisions, the trend for the current year also appears quite encouraging for Doximity. Over the past month, five estimates have moved higher compared to no negative revisions, helping the consensus estimate increase 5.65%.
Thanks to promising estimate revisions, Doximity currently carries a Zacks Rank #1 (Strong Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.
Doximity shares have added 21.4% over the past four weeks, suggesting that investors are betting on its impressive estimate revisions. So, you may consider adding it to your portfolio right away to benefit from its earnings growth prospects.
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