- Doximity (NYSE:DOCS) is falling 15% after reporting results for the fiscal fourth quarter of 2022
- The main concern is weak guidance for the current quarter
- This disappointment briefly dragged DOCS stock below its $26 initial public offering price
Shares of Doximity (NYSE:DOCS) are down nearly 15% today after the online medical services company provided weak forward guidance.
Today’s plunge builds on the 35% year to date decline in DOCS stock and pulls the company’s share price down below its IPO price. Created in 2010, Doximity runs an online platform that provides medical professionals with curated news, telehealth tools and enables them to engage in case collaboration.
What Happened With DOCS Stock
Doximity reported revenue for its fiscal fourth quarter of $93.7 million, which was up 40% from $66.7 million a year ago. Net income came in at $36.7 million, up 39% compared to $21.5 million.
However, despite the strong earnings growth, Doximity issued a weaker-than-expected revenue forecast for the current quarter, sending its stock sharply lower today. The company is forecasting revenue of $88.6 million to $89.6 million. Wall Street expects $96.78 million.
Why It Matters
DOCS stock has been struggling this year amid a broader market downturn and rotation out of high-growth, unprofitable tech stocks. The lower revenue guidance further shakes analyst and investor confidence in Doximity’s ability to grow its business.
With investors growing increasingly concerned about higher interest rates and the potential for an economic recession, there is little tolerance for companies that miss expectations or lower forward guidance. Retail giant Walmart (NYSE:WMT), for example, saw its stock fall 11% after it too lowered its forward guidance.
What’s Next for Doximity
DOCS shareholders will have to stomach more pain today as the company’s stock takes a beating following its lowered revenue outlook. Long term, the stock could still recover, but it is not a good sign that Doximity’s shares fell below their IPO price. A recovery could be several months or years away at this point.
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.
