Doximity (ticker: DOCS) experienced a significant surge in its stock price after the online platform for medical professionals announced an optimistic outlook, leaving analysts positively inclined towards its future.
Strong Outlook Leads to Stock Surge
In premarket trading on Friday, Doximity’s stock rose by 19% to $24.41. The company’s fiscal second-quarter results, released on Thursday, included an announcement that it expects to generate revenue between $460 million and $472 million for the fiscal year. Additionally, its projected adjusted earnings before interest, tax, depreciation, and amortization are estimated to be between $207 million and $219 million. These updated figures surpassed the previous expectations of revenue between $452 million and $468 million, and adjusted earnings between $193 million and $209 million.
Analysts React Positively
Analysts Ryan Daniels and Jared Haase from William Blair were particularly enthusiastic about the new guidance, stating, “We believe the solid results and improved guidance range mark a positive step for the company, as management seeks to rebuild credibility with investors following multiple guidance resets in recent quarters.” The analysts have given the shares an Outperform rating.
Brian Peterson and the team of analysts at Raymond James also share an optimistic perspective, rating Doximity shares as Outperform and providing a price target of $30. They commented, “While the company isn’t fully immune from cyclical dynamics … recent developments have increased our conviction in DOCS’ ability to grow faster than the overall market.”
Impressive Second Quarter Results
Doximity reported adjusted earnings of 22 cents per share for its fiscal second quarter, surpassing Wall Street estimates of 17 cents per share, according to FactSet. The company’s revenue for the quarter was $113.6 million, exceeding expectations of $109.1 million.