Key Takeaways
- Doximity’s adjusted EPS came in at $0.26, falling short of the $0.28 Wall Street consensus.
- Quarterly revenue increased 5% year-over-year to $145.4 million, marginally exceeding expectations.
- Fiscal 2027 full-year revenue guidance of $664–$676 million substantially missed analyst projections of $697.4 million.
- Multiple firms including Jefferies, Wells Fargo, and KeyBanc downgraded DOCS following the earnings report.
- The stock plunged approximately 21% in premarket action Thursday and has declined roughly 47% year-to-date.
Shares of Doximity were hovering near $18.45 during premarket trading Thursday morning — representing a steep decline of approximately 21% from the prior day’s closing price of $23.39 — following the company’s release of underwhelming quarterly results and a revenue forecast that fell significantly below Street expectations.
The healthcare-focused digital platform delivered adjusted earnings per share of $0.26 for its fourth fiscal quarter, falling short of the $0.28 consensus forecast. This marked a decline from the $0.36 per share the company reported in the comparable quarter one year earlier.
Quarterly revenue reached $145.4 million, representing a 5% increase from the prior-year period and modestly surpassing the $144 million analyst consensus. However, this marginal revenue beat proved insufficient to alleviate mounting investor concerns.
[[TWITTER_EMBED]]Adjusted EBITDA for the period totaled $65.8 million, reflecting a 6% year-over-year decrease, with management attributing the margin pressure to escalating investments in AI infrastructure.
During the earnings conference call, CEO Jeff Tangney emphasized robust platform engagement, highlighting that more than 800,000 active prescribers utilized Doximity’s workflow solutions in Q4. “Close to half of these healthcare providers leveraged our clinical AI capabilities last quarter, and our prompts per user nearly doubled between January and April,” Tangney stated.
Revenue Outlook Disappoints Investors
The primary concern for market participants centered on forward guidance. For fiscal year 2027 ending March, Doximity projected revenue between $664 million and $676 million. This range sits considerably below the $697.4 million that analysts had anticipated.
First-quarter guidance also underwhelmed. Management forecast revenue of $151 million to $152 million, trailing the $153.7 million consensus estimate.
Executives acknowledged that “near-term demand within the HCP digital pharmaceutical advertising market remains subdued” and cited broader macroeconomic uncertainty and regulatory risks as factors creating limited visibility. The company anticipates overall market expansion to remain muted, likely at or under 5%.
Adjusted EBITDA margin for fiscal 2027 is projected to approximate 49%, representing a compression from previous levels, primarily driven by increased AI computing expenses.
Wave of Analyst Downgrades Hits Stock
The disappointing results prompted swift action from Wall Street analysts. Jefferies downgraded DOCS from Buy to Hold and slashed its price target from $51 to $19, citing limited visibility into pharmaceutical advertising budgets and mounting AI-related expenditures.
Wells Fargo reduced its rating from Overweight to Equal Weight with a revised price target of $18. KeyBanc shifted to Sector Weight, observing that potential customers are increasingly exploring AI-powered and more cost-effective alternatives to Doximity’s offerings.
Broader equity markets provided no support. The S&P 500 climbed 0.58% and the Nasdaq advanced 1.20% on Thursday, indicating the DOCS selloff was driven entirely by company-specific factors.
DOCS now trades approximately 69% below its 52-week peak of $76.51. During the 90-day period preceding the earnings release, the stock experienced zero upward EPS estimate revisions and 15 downward adjustments — suggesting investor 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 documentation assistance and an AI-powered assistant, directly into Aledade’s platform infrastructure.
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