What happened
Shares of Doximity (DOCS 4.26%) were up 7.7% as of market close on Monday. The professional medical social network and telemedicine company didn't issue any news today that caused the spike in share price. This seems more likely a continuation of the bullish investor feelings on the company after it reported stellar quarterly earnings in February.
Additionally, healthcare stocks in general have been exhibiting relative outperformance of market averages amid Russia's ongoing invasion of Ukraine. The S&P 500 healthcare sector was down only 1.7%, while the S&P 500 index overall was down 3% on the day. Healthcare is often viewed as a defensive investment.
Image source: Getty Images.
So what
Doximity was off to the races last summer after its initial public offering, but it got hit hard along with other high-growth but richly valued stocks late in the year. However, shares have begun to rally again and are up 10% so far in 2022.
Shareholders can thank the company's third-quarter fiscal 2022 earnings update released early in February. Revenue grew 67% year over year, and across-the-board profitability was recorded as well (on both an adjusted and unadjusted basis). Free cash flow generated was $113 million over the last 12-month stretch, good for a free-cash-flow margin of 36%. Doximity is also acquiring software outfit Amion to increase its capabilities in physician scheduling.
While other healthcare technologists like Teladoc Health continue to struggle because of net losses, Doximity is delivering the goods, reporting stellar sales growth and creating shareholder value with highly profitable operations.
Now what
The market is still on tenuous footing as the Federal Reserve is gearing up to begin raising interest rates later this month. Higher rates especially impact high-growth companies like Doximity, so expect ongoing volatility to remain present.
Nevertheless, in an industry ripe for technological disruption, Doximity is good stuff. It's finding plenty of demand for its app and services that help make life easier for doctors, patients, and overall provide more efficient delivery of care.
