Growth stocks of all descriptions were beaten mercilessly over the past year thanks to a tsunami of unfavorable economic conditions. But the important thing to remember at times like these is that the losses won't last forever.

We can't say for sure when the next bull market will begin, but we know that every market downturn in history has been wiped away by subsequent recoveries. With this in mind, investing in great businesses while a generally depressed market applies pressure to their stock prices could lead to enormous gains over the long run.

One exceptional growth stock investors want to consider buying now is down around 69% from its all-time high. Here's why those who buy now and hold on for the long run could receive market-beating gains.

A niche player that's outperforming its generalist peers

Doximity (DOCS -0.84%) is a social media platform built exclusively for U.S. healthcare professionals. With roughly 80% of the nation's physicians already signed up, it offers drugmakers and hospital systems extremely valuable ad inventory.

The top 20 pharmaceutical companies and the top 20 hospital systems all have contracts with Doximity. Investors will be interested to know those companies are devoting an increasing portion of their available ad budgets to Doximity.

During the company's fiscal third quarter that ended Dec. 31, management reported a 127% revenue retention rate from its top 20 clients. Top-line revenue during fiscal 2023, which ends on March 31, is expected to come in 22% higher than the previous year.

Doximity's growth rates have decelerated somewhat in fiscal 2023, but it's clearly gaining on its generalist peers. Alphabet recently reported fourth-quarter Google advertising revenue that fell 3.6% year over year. Facebook parent Meta Platforms recently reported annual revenue that shrank by 1% year over year due to average ad prices that slipped 16% in 2022.

Productivity tool sales

Doximity leverages the popularity of its social media platform to launch new productivity tools designed for physicians. A popular one, the Doximity Dialer, allows physicians to contact patients in a privacy law-compliant setting while using their personal devices.

Thanks to Dialer, a record-setting 375,000 unique providers used Doximity's telehealth tools during the fiscal third quarter. Doximity designs productivity tools for doctors, not their employers. Those tools are so popular, though, that health systems are increasingly willing to pay for premium features. For example, an estimated 35% of U.S. physicians already have access to enterprise-level Dialer integration via the health systems they work for.

In addition to Dialer, Doximity markets a fax service and an on-call scheduling application. Its most popular productivity tool, though, could be a generative artificial intelligence bot that employs ChatGPT and related applications. It's currently in beta testing, but DocsGPT could be used to automate away fairly repetitive tasks such as peer credentialing letters or replying to pharmacy fax forms.

Not an experiment

Unlike many of the growth stocks that have been badly beaten down over the past year, Doximity is already growing under its own steam. The company reported $47.5 million in free cash flow during its fiscal third quarter, which is an 85% improvement over the previous-year period.

At recent prices, investors can buy the stock for 36.5 times the amount of free cash flow its operations generated over the past year. This is a steep multiple, but not for a company that just grew total sales by 18% during an unusually difficult period for other social media platforms. 

If Doximity's growth stalls out, investors who buy at recent prices could suffer heavy losses. Without any other large physician-focused social media platforms out there to compete with, though, this seems unlikely.

Put it all together, and right now looks like a great time to buy this stock.