Doximity (DOCS) Stock Plunges 21% on Disappointing Guidance and Earnings Miss

Key Takeaways

• Doximity’s adjusted EPS of $0.26 fell short of the $0.28 Street consensus.
• Q4 revenue climbed 5% to $145.4 million, marginally surpassing forecasts.
• Fiscal 2027 revenue guidance of $664–$676 million missed analyst expectations of $697.4 million by a wide margin.
• Major banks including Jefferies, Wells Fargo, and KeyBanc downgraded DOCS following the earnings report.
• Shares plummeted approximately 21% in premarket hours Thursday and have declined about 47% so far this year.

Shares of Doximity were changing hands around $18.45 during premarket activity Thursday — representing approximately 21% decline from Wednesday’s closing price of $23.39 — following the telehealth company’s underwhelming quarterly results and disappointing forward guidance.

Doximity, Inc., DOCS

The digital health platform delivered adjusted earnings of $0.26 per share for its fiscal fourth quarter, falling short of Wall Street’s consensus projection of $0.28. This marks a decline from the $0.36 per share the company recorded during the comparable quarter last year.

Quarterly revenue reached $145.4 million, representing a 5% increase compared to the prior-year period and modestly exceeding the Street’s $144 million projection. However, this minor revenue outperformance did little to calm investor anxiety.

The company’s adjusted EBITDA totaled $65.8 million for the quarter, declining 6% year-over-year, with management attributing the margin pressure to increased investments in AI infrastructure.

CEO Jeff Tangney highlighted robust platform engagement during the earnings conference call, revealing that more than 800,000 active prescribers utilized Doximity’s workflow solutions in Q4. “Approximately half of these healthcare providers engaged with our clinical AI capabilities last quarter, and we witnessed our prompts per user nearly double between January and April,” Tangney stated.

Forward Outlook Disappoints Market

The primary catalyst for the sharp selloff was the company’s underwhelming forecast. For fiscal 2027 ending March, Doximity projected revenue ranging from $664 million to $676 million. This guidance came in substantially below analysts’ collective expectation of $697.4 million.

The company’s first-quarter outlook similarly underwhelmed. Management forecasted Q1 revenue between $151 million and $152 million, trailing the Street’s estimate of $153.7 million.

Executives acknowledged that “near-term demand within the healthcare professional digital pharmaceutical advertising market remains challenged” and cited macroeconomic headwinds and regulatory uncertainty as factors constraining visibility. The company anticipates overall market expansion to stay subdued, likely hovering at or below 5%.

For fiscal 2027, adjusted EBITDA margin is projected at approximately 49%, declining from previous levels, primarily driven by escalating AI computational expenses.

Wall Street Analysts Slash Ratings

The disappointing results prompted immediate responses from Wall Street analysts. Jefferies downgraded DOCS from Buy to Hold while slashing its price target from $51 to $19, citing limited visibility into pharmaceutical advertising budgets and mounting AI infrastructure costs.

Wells Fargo shifted its rating from Overweight to Equal Weight, establishing a new price target of $18. KeyBanc moved to Sector Weight, observing that potential customers are increasingly evaluating AI-powered and more cost-effective alternatives to Doximity’s offerings.

Broader market strength provided no support. The S&P 500 advanced 0.58% while the Nasdaq climbed 1.20% on Thursday, indicating the DOCS selloff was driven entirely by company-specific factors.

Shares are currently trading approximately 69% below the 52-week peak of $76.51. During the 90-day period preceding the earnings release, the stock experienced zero upward EPS revisions and 15 downward adjustments — demonstrating that analyst sentiment had already deteriorated significantly.

The company separately announced a strategic partnership with Aledade, a value-based care organization, through which Doximity will integrate its clinical AI tools, including its documentation assistant and AI-powered clinical support system, directly into Aledade’s platform.

The post Doximity (DOCS) Stock Plunges 21% on Disappointing Guidance and Earnings Miss appeared first on Blockonomi.