Please ensure Javascript is enabled for purposes of website accessibility

Here's Why Doximity Stock Is Surging Today

By Cory Renauer – Aug 11, 2021 at 2:14PM

Key Points

  • Doximity's popular networking app for American physicians produced revenue that more than doubled year over year.

Motley Fool Issues Rare “All In” Buy Alert

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The networking platform for healthcare professionals keeps exceeding expectations.

What happened

Shares of Doximity (DOCS 2.02%) are on the move after an encouraging fiscal first-quarter earnings report. Investors excited about the niche healthcare networking platform's expanding profit margins drove the stock 21.9% higher as of 1:06 p.m. EDT on Wednesday.

So what 

Doximity made its stock market debut just a couple of months ago, so this was its first quarterly earnings report as a publicly traded company. Expectations were high, but the company exceeded them anyway.

Healthcare professionals  look at a tablet.

Image source: Getty Images.

During the company's fiscal first quarter ended June 30, 2021, total revenue more than doubled compared with the previous year to $72.7 million. The stock probably would have risen even further, but management also told investors to expect revenue during the fiscal second quarter to land in a range between $73 million and $74 million.

Now what

For the entire fiscal year, Doximity expects adjusted earnings before interest, taxes, depreciation, and amortization, or EBITDA, to land in a range between $106 million and $109 million. With an $11.4 billion market cap at the moment, you're probably thinking this stock's valuation is absolutely insane.

This company's unique position in America's gigantic healthcare system gives Doximity a pretty good chance to grow into its valuation. That's because out of around $4 trillion in annual U.S. healthcare spending, around three-quarters is heavily influenced by physician decisions. Doximity already counts among its members more than 80% of the nation's physicians.

In addition to being in a great place to market products and services to physicians, Doximity also operates a rapidly growing telehealth solution. Despite being relatively new to the game compared with companies like Teladoc Health, Doximity delivered 63 million telehealth visits last year. With diverse contributors to a high-margin revenue stream that's growing fast, this might be one of the best stocks you can buy right now. 

Cory Renauer has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Teladoc Health. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Doximity, Inc. Stock Quote
Doximity, Inc.
$32.80 (2.02%) $0.65

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 11/30/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.