Doximity (NYSE: DOCS)
A High-Quality Health Tech Platform After a Sharp Reset
After a tough pullback over the past month, Doximity is starting to look much more compelling at current levels. Shares have corrected roughly 30% since the company’s Nov. 6 earnings report, and that decline has created what we see as a far more attractive entry point for a business whose fundamentals remain intact.
Doximity operates a digital platform used daily by medical professionals, and one thing that stands out is how deeply embedded it has become in clinicians’ workflows. The company has steadily expanded beyond simple networking into multiple touchpoints across a typical workday. New product launches and targeted acquisitions have helped increase engagement, and while user growth has moderated, time spent on the platform continues to rise. That’s an important distinction, especially when monetization is driven by depth of usage rather than raw user counts.
Advertising remains a core strength. Doximity is still the clear leader in pharma-focused digital advertising aimed at healthcare professionals, and the opportunity set appears to be expanding as AI-enabled workflow tools make these platforms more valuable to both users and advertisers. Concerns about competitive threats have weighed on the stock, but from what we can see, those fears look overdone given Doximity’s entrenched position and strong engagement metrics.
Financially, the company continues to generate robust free cash flow and maintains a strong balance sheet, giving it flexibility to keep investing through market volatility. Valuation has also come back to earth. The stock now trades at more than a 25% discount to its median post-COVID EV-to-EBITDA multiple, a notable shift for a business with this level of profitability and platform strength.
Morgan Stanley recently upgraded the stock to Overweight and raised its price target to $65 from $62, pointing to meaningful upside from here. Shares trade around $44 today, and while the stock has slipped about 18% this year, that underperformance looks increasingly disconnected from the company’s operating momentum.
For investors looking for a health tech platform with durable engagement, strong cash generation, and a valuation reset already in the rearview mirror, this setup is worth a close look.
