Why Is Doximity (DOCS) Stock Up 23% Today?

  • Shares of medical technology firm Doximity (DOCS) stock skyrocketed on Friday.
  • The company delivered outstanding results for its fiscal second quarter.
  • DOCS stock appears poised to reverse this year’s ugly print.
DOCS stock - Why Is Doximity (DOCS) Stock Up 23% Today?

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Amid a relatively soft background in the equities sector, medical technology firm Doximity (NYSE:DOCS), which primarily provides online networking services for medical professionals, delivered better-than-expected results for its fiscal second-quarter earnings report. As well, DOCS stock received an analyst price target bump, contributing to a 23% gain in the morning session. At the time of writing, shares moved up nearly 27%.

On the bottom line, Doximity delivered earnings per share of 17 cents, beating out Zacks Equity Research’s consensus target of 16 cents. In the year-ago period, the med-tech firm posted EPS of 19 cents. These figures are adjusted for non-recurring items. Interestingly, over the last four quarters, the company surpassed consensus EPS estimates four times.

On the revenue front, Doximity generated $102.19 million, exceeding Wall Street’s consensus target by 2.33%. In addition, this latest tally compares very favorably to the year-ago quarter’s haul of $79.35 million. As well, Doximity topped revenue estimates four times out of the last four quarters.

“We were pleased to beat on both our top and bottom lines while delivering our first nine-figure revenue quarter,” said Doximity CEO and co-founder Jeff Tangney. “Our telehealth platform grew to a record 370,000 quarterly active clinicians. We will continue to invest in building tools to help physicians save time, so they can provide better care for their patients.”

Enthusiasm Builds for DOCS Stock

To be fair, not every line item in the fiscal Q2 disclosure presented an optimistic take for DOCS stock. Primarily, management “expects to see revenue for the third quarter of $110.7 million to $111.7 million,” according to MarketWatch. However, analysts have a higher expectation, calling for $113 million.

Presumably, then, when Doximity reveals its results for the current quarter, it will need to exceed its internal top-end revenue forecast by nearly 1.2% to please Wall Street. Nevertheless, DOCS stock responded robustly to the holistically positive picture for the underlying business.

Most prominently, Wells Fargo raised its price target for DOCS stock to $44 from $38 a share. As well, the research arm of the banking giant maintained its “overweight” rating. According to TipRanks, Doximity overall has a “moderate buy” consensus rating. This breaks down to seven buys, four holds and one sell rating.

Prior to the recent surge, DOCS stock struggled badly so far this year. Even now, its year-to-date performance is nearly 35% below parity. At the same time, over the trailing five-day period, DOCS gained over 35%. Therefore, it appears poised to help reverse what has been an ugly downward spiral.

On the date of publication, Josh Enomoto 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.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.

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