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HomeMarketAnalysts see Doximity stock outperforming on earnings, shorts covering By Investing.com

Analysts see Doximity stock outperforming on earnings, shorts covering By Investing.com

© Reuters. Analyst sees Doximity (DOCS) stock outperforming on earnings, shorts covering
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By Senad Karaahmetovic

Shares of Doximity (NYSE:) are up over 18% in pre-open trading after the company reported better-than-expected results for its fiscal second quarter.

Doximity EPS of $0.17 on revenue of $102.2 million, ahead of the consensus that called for EPS of $0.15 on sales of $100.29 million. The company generated $46 million in adjusted EBITDA.

For this quarter, Doximity said it expects to generate $111.2 million (the midpoint) in revenue, lower than the $114.88 million consensus. The adjusted EBITDA is seen at $46.7 million (the midpoint), again missing the $52.6 million consensus. The company reaffirmed its full-year forecast for revenue and adjusted EBITDA.

DOCS stock has also been boosted by the new buyback plan for up to $70 million of the company’s Class common stock.

Evercore ISI analysts said the FQ2 performance is “a sigh of relief.” The analysts raised the price target to $32 per share from $28 to reflect a “reaffirmed outlook and improving investor comfort around inflation.”

However, they remain In-line rated on DOCS stock as is “still at risk of facing pharma budget headwinds going into the back half of FY23 despite its stronger than guided performance in 2Q23 (will keep eye out in 2H23).”

Wells Fargo analysts reiterated an Overweight rating and raised the price target to $44 per share from $38. The analysts are especially positive about the updates during the earnings call, including the improved ROI stats.

“We believe these metrics will improve DOCS’ growth prospects and business defensibility, as a higher ROI helps justify price increases for renewed contracts, helps capture new business and incremental ad budget spend, take share from competitors, and ideally place DOCS last in line if/when clients seek places to cut spend,” the analysts wrote in a note.

Story Credit: investing.com

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