What happened

Shares of Doximity (DOCS 0.88%), a digital platform for healthcare professionals, fell 12.4% in October, according to data from S&P Global Intelligence. The stock ended September at $30.22. 

Doximity opened October at $30.40, falling to a monthly low of $24.15 on Oct. 24. It ended October at $26.47 a share. So far this year, the stock is down more than 52%. It has a 52-week low of $23.62 and a 52-week high of $76.88. 

So what

Doxmity had no big news during the month, but digital advertising in general took a big hit in October, and investors noticed. Much of Doximity's revenue comes from advertisers who are looking to reach medical professionals, a key demographic. 

Meta Platforms, the parent company of Facebook, and Alphabet, the parent of Google -- two of the giants in digital advertising revenue -- reported significant slowdowns in ad revenue in their third-quarter earnings reports in October. Meta announced revenue was down 4%, year over year, while Alphabet said advertising revenues grew just 2.5% year over year, compared to the 43% growth it posted a year ago. Alphabet subsidiary YouTube saw its ad revenue drop nearly 2% from the same period last year. 

The thinking is, companies concerned about a potential recession are making big pullbacks in advertising spending, and that includes spending on ads to reach medical professionals.

Now what

Nearly 80% of physicians in the United States use Doximity. Its popular Doximity Dialer app allows doctors to reach patients from their cellphones but using their office number and is HIPAA (Health Insurance Portability and Accountability Act) compliant in regards to  patient privacy. The company enjoys a big first-to-market advantage regarding medical professionals; when macroeconomic conditions swing back to boost digital advertising spending again, it should continue to thrive.

The company has other premium features that it derives money from, so advertising isn't its only revenue stream. The company's fiscal 2023 first-quarter revenue was a reported $90.6 million, up 25% year over year, but net income was $22.4 million, down from $26.3 in the same period last year. The company's Q2 numbers don't come out until Nov. 10, so investors must wait to see how big a decline, if any, the company experiences regarding digital advertising.