Core Viewpoint - Investors are selling off software stocks due to fears over AI disruption, creating buying opportunities for high-quality businesses [1] Group 1: Company Overview - Doximity, a social feed and software provider for doctors, has seen its stock fall by 66% in the past year, trading close to an all-time low [2] - The company has a market cap of $4.7 billion, with a current stock price of $25.57 and a 52-week range of $23.66 to $76.51 [3] - Doximity began as a social network for medical professionals, allowing them to receive healthcare news and collaborate in a HIPAA-compliant manner [3] Group 2: Business Model - Doximity generates revenue through sponsorships from pharmaceutical companies, with 126 customers spending over $500,000 annually on the platform [4] - Approximately 85% of physicians in the U.S. use Doximity, indicating a strong market presence with little competition [4] Group 3: Growth Potential - The company is expanding into new software tools, including the DoxGPT AI assistant, which is expected to increase user engagement and revenue over time [5] - Revenue growth has been significant, increasing by 448% since March 2020, although it has slowed to 10% year-over-year growth last quarter [7] - Doximity has a strong EBIT margin of 38.5%, indicating best-in-class profitability for a software provider [8] Group 4: Investment Consideration - With a price-to-earnings ratio of 21, Doximity may present a growth stock opportunity amidst the current software market dip driven by AI fears [8]

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Core Insights - The analyst previously held a hold rating for Doximity Inc. (DOCS) due to high valuation and poor guidance, but the current assessment of the core business suggests potential for improvement [1] Company Analysis - The investment approach emphasizes understanding core economics, including competitive moat, unit economics, reinvestment runway, and management quality, which are crucial for long-term free cash flow generation and shareholder value creation [1] - The focus is on sectors with strong secular tailwinds, indicating a preference for industries that are expected to grow over time [1] Investment Philosophy - The analyst is a self-educated investor with 10 years of experience, currently managing personal funds sourced from friends and family [1] - The motivation for sharing insights on Seeking Alpha is to provide valuable analysis and receive feedback from other investors, aiming to highlight what drives long-term equity value [1]

Market Overview - Futures are trading lower after a significant rally on Friday, where major indices surged following a three-day sell-off that nearly caused a market meltdown [2] - The Dow Jones Industrial Average reached a new all-time high, closing at 50,115, up 2.47%, while the S&P 500 and Nasdaq also saw gains of 1.97% and 2.18% respectively [2] - The Russell 2000, representing small-cap companies, surged 3.60% to close at 2,670 [2] Treasury Bonds - Treasury yields remained largely unchanged as traders awaited confirmation of the rally's sustainability [3] - Short-term debt was sold off as investors shifted towards riskier assets, leading to a slight steepening of the yield curve [3] - The 30-year bond closed at 4.85%, while the benchmark 10-year note was at 4.21% [3] Oil and Gas - Oil prices increased amid rising geopolitical tensions between the U.S. and Iran, with Brent crude closing at $68.05, up 0.64%, and West Texas Intermediate at $63.55, up 0.41% [4] - Natural gas prices fell by 2.48% to $3.42 due to profit-taking and expectations of warmer weather [4] Economic Outlook - Attention will shift to economic data as fourth-quarter earnings season concludes, particularly following surprising January layoff figures [5] - Market technicians will monitor trading patterns for potential follow-through from the recent rally and anticipate continued sector rotation [5]

Core Viewpoint - Doximity Inc (NYSE:DOCS) is facing significant stock price volatility, with recent analyst ratings reflecting mixed sentiments about its future performance [1][2][3][4][6] Stock Performance - Doximity's stock opened at $23.69 after closing at $33.32, with the last traded price at $25.50, indicating a notable decline [2] - The current stock price is $27.73, down 16.78% from a previous high of $85.21 over the past year, with a trading range between $23.66 and $27.88 [4][6] - The trading volume today reached 22.18 million shares, suggesting strong investor interest despite the price fluctuations [5] Analyst Ratings - Canaccord Genuity set a price target of $34 for DOCS, indicating a potential upside of 22.61% from its current price [1] - Wall Street Zen downgraded DOCS from "buy" to "hold," while Weiss Ratings maintained a "hold (c+)" rating [2] - Conversely, Wells Fargo upgraded DOCS to "overweight" with a target price of $55.00, and both the Royal Bank Of Canada and Needham and Company LLC upgraded to "moderate buy" [3][6] Market Capitalization - Doximity's market capitalization is approximately $5.2 billion, reflecting its position in the healthcare technology sector [5]

Core Insights - Doximity, Inc. reported adjusted earnings per share (EPS) of 46 cents for Q3 fiscal 2026, a 2.2% increase year over year, exceeding the Zacks Consensus Estimate by 4.5% [2] - The company's revenues for the quarter reached $185.1 million, marking a 10% year-over-year growth and surpassing the Zacks Consensus Estimate by 2.3% [3] Financial Performance - Subscription revenues amounted to $175.4 million, up 8.1% year over year, driven by a 112% net revenue retention rate and growth in large accounts [4] - Other revenues increased significantly by 52.6% year over year to $9.7 million [4] - Gross profit rose 7.7% year over year to $166.4 million, but gross margin contracted by 170 basis points to 89.9% [5] - Operating profit totaled $71.9 million, reflecting a 10% decline from the prior year, with operating margin contracting 855 basis points to 38.9% [6] Cash Position - Doximity ended Q3 fiscal 2026 with cash and cash equivalents of $64.8 million, down from $169.2 million at the end of Q2 [7] - Cumulative net cash provided by operating activities was $216.9 million, compared to $174.8 million a year ago [7] Guidance - For Q4 fiscal 2026, Doximity expects revenues between $143 million and $144 million, below the Zacks Consensus Estimate of $149.8 million [10] - The full fiscal year revenue outlook has been narrowed to between $642.5 million and $643.5 million, compared to the previous range of $640 million to $646 million, also below the consensus estimate of $645.3 million [10] Growth Drivers - Doximity experienced strong platform momentum with 3 million registered members, reaching over 85% of U.S. physicians [12] - Engagement metrics showed record highs, with significant increases in active users and workflow solutions [13] - AI adoption was a key growth driver, with over 300,000 prescribers using Doximity's AI tools during the quarter [14]

Core Viewpoint - Doximity, Inc. experienced a significant decline in share price following the announcement of lower third-quarter profits, despite reporting revenue growth [1]. Financial Performance - Doximity reported a net income of $61.55 million, or $0.31 per share, which is a decrease from $75.19 million, or $0.37 per share, in the same quarter last year [3]. - On an adjusted basis, earnings were reported at $0.46 per share [3]. - Revenue increased by 9.8 percent to $185.05 million, up from $168.60 million year-over-year [3]. Stock Performance - The stock closed at $24.72, down 25.77 percent from a previous close of $33.34 [1][2]. - Shares opened at $34.55 and traded within a range of $23.66 to $26.51 during the day [2]. - Trading volume reached approximately 4.30 million shares, significantly higher than the average volume of about 2.95 million shares [2]. - The stock is currently trading near the lower end of its 52-week range, which is between $23.66 and $85.21 [3].

Core Insights - Artificial intelligence (AI) is identified as the greatest investment opportunity of the current era, with a strong emphasis on the urgent need for energy to support its growth [1][2][3] - A specific company is highlighted as a key player in the AI energy sector, owning critical energy infrastructure assets that are essential for meeting the increasing energy demands of AI technologies [3][7] Investment Opportunity - Wall Street is investing heavily in AI, with hundreds of billions directed towards developing smarter technologies, but there is a looming question regarding the energy supply needed to sustain this growth [2] - The company in focus is positioned to benefit from the surge in demand for electricity driven by AI data centers, making it a potentially lucrative investment opportunity [3][8] Company Profile - The company is described as a "toll booth" operator in the AI energy boom, collecting fees from energy exports and poised to capitalize on the onshoring trend driven by tariffs [5][6] - It owns significant nuclear energy infrastructure, which is crucial for America's future power strategy, and is capable of executing large-scale engineering projects across various energy sectors [7][8] Financial Position - The company is noted for being debt-free and holding a substantial cash reserve, which is approximately one-third of its market capitalization, providing it with a strong financial foundation [8][10] - It also has a significant equity stake in another AI-related company, offering investors indirect exposure to multiple growth opportunities without the associated premium costs [9][10] Market Trends - The article discusses the broader trends of AI, energy, tariffs, and onshoring, indicating that this company is strategically positioned to leverage these interconnected developments [6][14] - The influx of talent into the AI sector is expected to drive continuous innovation, further solidifying the importance of energy infrastructure in supporting this growth [12]

Core Insights - Doximity reported revenue of $185.05 million for the quarter ended December 2025, marking a year-over-year increase of 9.8% and exceeding the Zacks Consensus Estimate of $181.03 million by 2.23% [1] - The company's EPS for the same period was $0.46, slightly up from $0.45 a year ago, and also surpassed the consensus EPS estimate of $0.44 by 4.55% [1] Financial Performance Metrics - Doximity's stock has returned -24.2% over the past month, contrasting with the Zacks S&P 500 composite's +0.5% change, indicating underperformance relative to the broader market [3] - The company holds a Zacks Rank 2 (Buy), suggesting potential for outperformance in the near term [3] Customer and Revenue Breakdown - The number of customers generating at least $500,000 in revenue was reported at 126, slightly below the average estimate of 129 by two analysts [4] - Other revenues reached $9.67 million, exceeding the average estimate of $8.19 million by five analysts, reflecting a significant year-over-year increase of 52.5% [4] - Subscription revenues totaled $175.38 million, surpassing the average estimate of $173.19 million by five analysts, and showing an 8.1% increase compared to the previous year [4]

Financial Data and Key Metrics Changes - The company reported Q3 revenue of $185 million, reflecting a 10% year-on-year growth and a 2% beat from the high end of guidance [6][14] - Adjusted EBITDA margin for Q3 was 60%, amounting to $111 million, which was 7% above the high end of guidance [7][14] - The net revenue retention rate was 112% on a trailing twelve-month basis, with the top 20 customers showing a higher retention rate of 117% [13][14] - Free cash flow generated in Q3 was $58.5 million, with cash, cash equivalents, and marketable securities totaling $735 million at the end of the quarter [15] Business Line Data and Key Metrics Changes - The company surpassed 3 million registered members, with over 85% of US physicians and two-thirds of NPs and PAs on the platform [7] - Unique active users for workflow tools reached a record 720,000 in Q3, marking the largest sequential gain ever [7] - Over 300,000 unique prescribers utilized AI products in Q3, with DocsGPT users querying the service an average of 4 times a week [9] Market Data and Key Metrics Changes - The company expects the healthcare and pharma digital advertising market to grow roughly 5% in calendar 2026, down from previous expectations [22] - The uncertainty surrounding Most Favored Nation (MFN) agreements impacted client budget deployments, leading to delays in signing deals [25][37] Company Strategy and Development Direction - The company aims to strengthen its AI-powered digital platform for doctors, focusing on building trust through its Peer Check program [12] - The strategy includes investing in AI infrastructure and development while maintaining a floor of 50% adjusted EBITDA margins [19][41] - The company plans to commercialize AI tools later in the year, tapping into clients' innovation and upsell budgets [19][40] Management's Comments on Operating Environment and Future Outlook - Management noted that the operating environment remains challenging due to policy headwinds and client uncertainty regarding budget allocations [17][25] - Despite a slower start to the year, management expressed optimism about ending calendar year 2026 with significantly better growth [19][46] - The company is positioned to capture the AI opportunity, with a focus on building trusted relationships with healthcare providers [66] Other Important Information - The company repurchased $196.8 million worth of shares during Q3 and has a new $500 million open-ended repurchase authorization [15] - The company has not yet included revenue from AI tools in its current guidance, as these products have not been commercialized [12][19] Q&A Session Questions and Answers Question: What is the expected market growth rate for calendar year 2026? - The company expects the market to grow roughly 5% in calendar 2026, influenced by recent policy changes and MFN agreements [22][25] Question: How does the company view the AI monetization opportunity? - The company sees a large opportunity in paid search and plans to tap into this market later in the year with commercial AI products [53] Question: What is the impact of policy uncertainty on pharma customers? - Many top 20 pharma customers faced delays in budget approvals due to policy uncertainty, but there is intent to deploy funds later in the year [37][63] Question: How is the company addressing talent retention in a competitive environment? - The company is focused on retaining talent by offering stock grants and fostering a mission-driven culture [71]