Doximity (NYSE:DOCS) stock is up more than 20% today after the online networking service for medical professionals announced that it has acquired a company that specializes in physician scheduling.
So what do you need to know now?
In a news release, Doximity said that it has acquired privately held Amion, which it describes as a leading on-call physician scheduling site. According to the release, Amion manages nearly 200,000 physician schedules at thousands of hospitals across America. This list of hospitals includes 18 of the top 20 in the country.
News of the acquisition has sent DOCS stock sharply higher, which is good news for shareholders. Prior to today’s move, Doximity was down 3% year to date.
What Happened With DOCS Stock
To start, DOCS stock investors do not know the exact financial terms of the deal. However, they know that Doximity anticipates that the deal will close by April 1, 2022.
“We’re excited to partner with founder Stuart Karon and the Amion team to expand our physician cloud platform,” Doximity CEO Jeff Tangney said in the news release. “Scheduling enhances our collaboration suite and will grow engagement across all our businesses.”
The potential benefits to Doximity’s cloud computing unit appear to be what investors are reacting to regarding the Amion purchase.
Why It Matters
Amion’s scheduling service appears to make sense for Doximity, whose stated mission is to “help doctors be more productive.” Doximity’s online platform enables physicians to collaborate with colleagues, stay up to date on medical news and research, and meet with patients virtually. Its revenue comes from monthly subscriptions for its app, which it sells to practices and larger healthcare systems.
The acquisition of Amion comes as Doximity continues to grow, and as it faces stiff competition from other online healthcare companies such as Teladoc (NYSE:TDOC). Adding Amion’s physician scheduling system could further strengthen Doximity’s overall offerings and allow it to increase its pricing power. Both paths forward are positive for DOCS stock.
What’s Next for Doximity
DOCS stock gets a nice bounce today on news that it is acquiring Amion. Long term, Doximity will have to successfully integrate Amion’s physician scheduling service with its other products and market it. The company will have to keep its foot on the gas and continue growing to remain competitive in the telehealth space, which has become more intense during the Covid-19 pandemic.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.