Wall Street was generally in an upbeat mood Wednesday morning, with hopes that investors could break a string of losses for major market benchmarks in recent days. Stock index futures were up as much as half a percent as some projected a modest rebound for the market.
One reason why markets have been stuck in the doldrums as long as they have after 2022's bear market is that many of the software stocks that helped produce such impressive gains in 2020 and 2021 have failed to bounce back significantly. Some of those software-as-a-service (SaaS) stocks are finally showing more positive signs of recovery, as gains in Wix.com (WIX -2.00%) Wednesday morning indicated. However, further losses for Doximity (DOCS -2.73%) show that there's still more work to do before the entire group will be back in action.
Wix lights up
Shares of Wix.com moved higher by 6% in premarket trading Wednesday morning. The website creation specialist had a solid start to 2023, and investors are optimistic that the company can build on its momentum and produce a lasting recovery.
Wix saw revenue climb 10% year over year in the first quarter of 2023 to $374 million. The company got roughly equal contributions from its key segments, as business solutions revenue climbed 11% while creative subscriptions sales rose at a 9% clip. Total bookings climbed 6% to $415 million, and losses narrowed to $10.4 million, or $0.18 per share.
Wix believes that artificial intelligence (AI) will play a key role in its future growth. The company heralded its early work to help users incorporate AI into its website creation tools, and Wix is also integrating generative AI into its own internal workflows to boost efficiency.
Despite expressing some caution about macroeconomic conditions, Wix projected that second-quarter revenue growth would accelerate to between 10% and 12% from year-earlier levels. A boost of roughly $10 million on its annual sales guidance to a new range of $1.522 billion to $1.543 billion would imply double-digit growth as well. That's a far cry from the lightning-fast growth rates in past years, but it does suggest that Wix's business wasn't merely a flash in the pan.
Doximity disappoints investors
Heading the other way, shares of Doximity were down almost 10% early Wednesday. The digital platform geared toward medical professionals posted solid financial figures in its fiscal fourth-quarter report for the period ended March 31, but investors apparently wanted more signs that fiscal 2024 would fare better.
Doximity's fiscal fourth-quarter results were mixed. Revenue climbed 18% year over year to $111 million. However, margins fell sharply, and adjusted net income of $42.1 million was down 6% from year-ago levels, working out to $0.20 per share. That closed a fiscal year in which sales climbed 22% but adjusted net income was down 14% from the previous year.
Doximity is taking steps to keep improving its platform. It announced a new integration with electronic health systems leader Meditech that allows medical professionals to start a phone call or telehealth visit using Meditech's app, which will save time when setting up appointments.
Nevertheless, investors seemed to want more signs of accelerating growth than they got. Instead, fiscal 2024 projections for between $500 million and $506 million of revenue imply growth rates stuck around 20%, and that's likely going to keep Doximity stock well below the levels it reached shortly after its 2021 initial public offering.
