Is Doximity a good growth stock to own?
The operator of virtual platforms for healthcare professionals Doximity, Inc. (DOCS) recently released its strong third quarter results. Its revenue and EPS exceeded Street’s estimates by 13% and 142%, respectively. He also announced the acquisition of Amiona leading on-call physician scheduling site, to expand its physician cloud platform.
The stock is currently trading 46.7% below its all-time high of $107.79, which it reached on September 10, 2021 when the pandemic began. Thus, the short-term outlook for DOCS looks uncertain.
Here is what could influence the performance of DOCS in the coming months:
For the fiscal third quarter ended December 31, 2021, DOCS revenue jumped 57.6% year-over-year to $97.88 million. The company’s adjusted EBITDA rose 116.1% year-over-year to $46.98 million, while its non-GAAP net income was $63.63 million. dollars, a 226.6% year-over-year increase. Additionally, its non-GAAP EPS was $0.29, up 314.3% year-over-year.
In terms of EBITDA margin over the last 12 months, KIM’s 34.75% is 524.6% higher than the industry average of 5.56%. Likewise, its gross profit margin of 88.62% over the last 12 months is 57.5% above the industry average of 56.29%. Additionally, the stock’s trailing 12-month asset turnover rate of 0.56% is 62.9% higher than the industry average of 0.34%.
In terms of forward EV/S, DOCS’ 29.25x is 535.6% better than the industry average of 4.60x. Likewise, its forward P/S of 31.20x is 481.4% above the industry average of 5.37x. Additionally, the forward EV/EBITDA of the stock and non-GAAP PEG of 68.03x and 8.45x are above industry averages of 13.55x and 1.74x, respectively.
POWR ratings don’t indicate enough advantage
DOCS has an overall grade of C, which equates to a neutral in our POWR Rankings system. POWR ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
Our proprietary scoring system also rates each stock against eight different categories. DOCS has a D rating for value, in line with its above-industry valuation ratios.
DOCS also has a C rating for Sentiment. This is warranted as analysts expect its EPS to fall 2.6% in fiscal 2023.
Additionally, the stock has a C rating for Momentum, consistent with its 36.4% decline over the past six months.
DOCS is ranked #43 out of 85 stocks in the D rating Medical services industry. Click here to access all DOCS assessments.
DOCS looks overvalued at the current price level, so it might be wise to wait for a better entry point in the stock.
How does Doximity (DOCS) compare to its peers?
Although DOCS has an overall POWR rating of C, you may consider investing in the following medical and services stocks with an A (Strong Buy) rating: McKesson Corporation (MCK), NextGen Healthcare, Inc. (NXGN) and Computer Programs and Systems, Inc. (CPSI).
Shares of DOCS fell $0.47 (-0.82%) in after-hours trading on Thursday. Year-to-date, DOCS has gained 14.54%, compared to a -9.82% rise in the benchmark S&P 500 over the same period.
About the Author: Nimesh Jaiswal
At Nimesh Jaiswal His passionate interest in analyzing and interpreting financial data led him to a career as a financial analyst and journalist. The importance of financial statements in driving the price of a stock is the key approach he follows while advising investors in his articles. Continued…