Doximity Company Overview

Zacks Rank #1 (Strong Buy) stock Doximity (DOCS) is a networking platform for medical professionals built with tools for secure communication, telemedicine, and career development. Investors can think of Doximity as Microsoft’s (MSFT) “LinkedIn,” except rather than focusing on the entire job market, Doximity’s hype- focuses on the niche and unique healthcare provider market, helping doctors, nurse practitioners (NPs) and other clinicians to share ideas, communicate, and stay up-to-date with the latest medical news and research. Doximity also boasts a HIPAA (Health Insurance Portability and Accountability Act) approved secure messaging and video call platform for patient conversations, career listings, salary information, and digital faxing.

“The Digital Platform for Doctors”

Doximity dubs itself “The digital platform for doctors,” and its footprint in the market backs its bold website claim with hard data. According to Doximity’s latest earnings presentation, over 80% of all US physicians use Doximity. In early February, DOCS outlined its impressive financials, which included subscription revenue growth of 19% (the best kind of growth because it’s recurring), 1 117% net revenue retention rate, and some of the highest adjusted EBITDA margins on Wall Street (55%). Meanwhile, the company marked its fourth consecutive quarter of double-digit top-and-bottom line growth. Quarterly EPS grew 55% while revenue leaped 25% year-over-year.

Meanwhile, DOCS is not only growing rapidly and consistently, but the healthcare disruptor is smashing Wall Street analyst expectations along the way. In fact, since going public in 2021, DOCS has beat analyst expectations for fifteen straight quarters. Over the past four quarters, DOCS has delivered an average positive surprise of 26% over Zacks Consensus Analyst Estimates.

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DOCS: Standout RS & Post-EPS Pattern

While many growth stocks are more than 40% off their highs, DOCS has exhibited relative strength, gaining ~32% thus far year-to-date. The stock is consolidating smartly after jumping more than 30% following earnings. The relative strength and lack of selling in the stock suggest that when the market pressure is relieved, DOCS is poised to lead.

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Doximity: Transitioning Healthcare from Analog to Digital

In today’s heavily bifurcated political climate, it’s nearly impossible to find an issue on which both sides of the aisle can agree on. However, one rare issue that most anyone on the political spectrum can agree on is that US healthcare costs have gotten out of hand. The United States spends more per capita on healthcare than any other country, and the gap has expanded rapidly over time.

While many of these expenditures result from waste, fraud, and abuse, other inefficiencies contribute to the high costs. For instance, 80% of healthcare documents are sent via snail mail and fax, while 78% of physicians report burnout, with health IT being one of the least satisfying factors. Doximity is the antidote to many of these issues, and as healthcare providers slowly transition to the digital world, DOCS should be the primary beneficiary.

Bottom Line

Doximity’s robust growth, consistent earnings beats, and strategic positioning within the rapidly digitizing healthcare sector make it a compelling investment. By addressing critical inefficiencies and providing essential tools for medical professionals, DOCS is contributing to transforming of the healthcare industry.

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This article originally published on Zacks Investment Research (zacks.com).

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