What Happened?
Shares of medical professional network Doximity (NYSE: DOCS) jumped 7% in the afternoon session after the company's shares rebounded from a steep sell-off triggered by its weak financial guidance and mixed fourth-quarter results.
The move followed a sharp plunge during the previous trading session after the telehealth platform issued fiscal 2027 revenue guidance that fell significantly short of Wall Street estimates. While Doximity's fourth-quarter revenue of $145 million beat expectations, its adjusted earnings of $0.26 per share missed analyst forecasts, partly due to rising costs associated with artificial intelligence initiatives.
The disappointing outlook prompted multiple analysts to take action. For instance, Baird and Wells Fargo downgraded the stock, while others lowered their price targets, intensifying concerns about slowing growth.
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What Is The Market Telling Us
Doximity’s shares are very volatile and have had 22 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was about 23 hours ago when the stock dropped 25.9% on the news that the company reported underwhelming first quarter results: its revenue guidance for next year revealed a significant slowdown in demand and its full-year revenue guidance fell short of Wall Street's estimates.
Management noted that Pharma marketing budgets were being committed in shorter-duration tranches and the new AI search revenue won't meaningfully ramp until the second half of the fiscal year. On the other hand, Doximity blew past analysts' billings expectations and its EBITDA outperformed Wall Street's estimates. Still, this was a weaker quarter.
Doximity is down 55.9% since the beginning of the year, and at $19.09 per share, it is trading 74.6% below its 52-week high of $75.12 from September 2025. Investors who bought $1,000 worth of Doximity’s shares at the IPO in June 2021 would now be looking at an investment worth $360.34.
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