What happened

Shares of healthcare software company Doximity (DOCS -0.64%) took an 11.5% tumble last week. It capped off an atrocious first half of 2022, the worst first half of a year in more than half a century. Through July 1, the S&P 500 was down 19.7%, the Nasdaq Composite was down 25.9%, and Doximtiy took a 26.8% hit.  

So what

There was no specific news from Doximity to cause the drop last week. However, growth stocks in general continue to struggle after the U.S. Federal Reserve raised its short-term interest rate 0.75% in June. As a reminder, the present value of risk assets like stocks fall if interest rates rise.  

Inflation is still running hot right now, and there's expectation the Fed will raise interest rates again when it meets on July 26 and 27. Thus, high-growth stocks like Doximity that have high variability in profit generation have remained far more volatile than the stock market overall.  

Now what

The good news is that Doximity is as cheap as it's ever been since it became a publicly traded stock just over a year ago. Not only are shares just a few percentage points above their low point, but business is also growing rapidly. Management expects full-year fiscal 2022 revenue to increase about 33% year over year.

Even better, though high-growth companies like Doximity post highly variable profitability early on in their development, this healthcare software provider has already achieved great things. Free cash flow profit margin was 35% last year, and Doximity said it expects to generate an adjusted EBITDA margin of about 42 in the next year. The stock trades for a premium 58 times free cash flow, but that could be a great long-term bargain if you plan to hold for many years -- and if Doximity continues to carve out space for itself in the healthcare industry.