DOCS · Doximity
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $38.20
Note written ·
Price against the kill line
12.7% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $38.20, on record since 11 November 2026. The shares are up 36.0% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $38.20, about 15% over the 11 November 2026 close, which would show the shares leading the S&P 500; a fiscal fourth-quarter revenue guide implying growth of 8% or more would also show the call wrong.
Research onlyNot in the portfolio.
Catalyst
Key figures from the filings · Technology
Quarter to 30 September 2026, filed 5 November 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 175
- Revenue, change on a year (%)
- +3.6
- Gross margin (%)
- 85.5
- Operating margin (%)
- 25.2
- Net cash, cash less debt ($M)
- 219
- Price to earnings (×)
- 44.8
- Enterprise value to sales (×)
- 9.1
- Enterprise value to operating income (×)
- 34.7
All filed numbers
What Doximity reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 175 | +3.6 | 85.5 | 25.2 |
| first filed | 157 | +7.3 | 84.9 | 21.5 |
| first filed | 145 | +5.1 | 86.7 | 17.1 |
| first filed | 185 | +9.8 | 89.9 | 38.9 |
| first filed | 169 | +23.2 | 90.3 | 37.8 |
| first filed | 146 | +15.2 | 89.2 | 37.4 |
| Pre-tax income ($M) | 50.3 |
| Net income ($M) four quarters: 140 | 34.7 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | −6.4 |
| Operating cash flow ($M) | 306 |
| Capital spending ($M) | Not available |
| Free cash flow ($M) | Not available |
| Cash and short-term investments ($M) | 219 |
| Debt ($M) | None reported |
| Net cash, cash less debt ($M) no debt reported | 219 |
| Deferred revenue ($M) 0.0% on a year | 100 |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | 166 |
| Inventory ($M) | Not reported |
| Shareholders' equity ($M) | 929 |
| Market value ($M) | 6,261 |
| Enterprise value, market value plus net debt ($M) no debt reported | 6,043 |
| Enterprise value to sales (×) no debt reported | 9.1 |
| Enterprise value to operating income (×) no debt reported | 34.7 |
| Price to earnings (×) | 44.8 |
| Price to book value (×) | 6.7 |
| Free-cash-flow yield (%) | Not available |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 4.8% of shares outstanding sold short, 2.8 days of average trading to cover, −19.5% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $770K |
| 12 monthsfrom | $0 | $2.5M |
The thesis
Doximity's shares are more likely to lag the S&P 500 over the next three months. AI spending has cut profit while revenue growth sits at 4%, and the analyst targets set after the report mostly sit near or below the price. The fiscal third-quarter report, expected in early February 2027, settles it by showing whether pharmaceutical contracts and AI search lift growth toward the 6% management guided.
On 5 November 2026 Doximity reported revenue of $174.5 million for the quarter ended 30 September 2026, up 4% from $168.5 million, and above its $170–171 million guidance. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) fell 12% to $88.9 million, and its margin fell to 50.9% from 59.8%. Net income fell to $34.7 million from $62.1 million.
The outlook moved up only modestly. Full-year fiscal 2027 revenue guidance rose to $678–683 million, which the chief financial officer said on the 5 November 2026 call represents 6% growth at the midpoint. Third-quarter guidance is $195–196 million. On the same call he said fourth-quarter growth should be similar to the third-quarter rate, with lower visibility until the December pharmaceutical contract season closes.
The rating is Low because the beat was already priced in. The shares closed at $34.67 on 4 November 2026, before the report, and at $33.22 on 11 November 2026. Barclays (target $30, 11 November 2026) and Freedom Capital Markets (target $32, 10 November 2026) both raised their targets but kept neutral ratings with targets below that close.
Bullish and bearish views on Doximity, Inc.
The bull case on Doximity, Inc. (DOCS), in brief: revenue keeps clearing guidance. The bear case: growth is in the single digits.
Bull case
- Revenue keeps clearing guidance. Fiscal second-quarter revenue of $174.5 million beat the $170–171 million guide (company release, 5 November 2026). That followed fiscal first-quarter revenue of $156.6 million against a $151–152 million guide (company release, 6 August 2026).
- AI search has early pharmaceutical adoption. On the 5 November 2026 call, management said AI search is now an eight-figure bookings product. It said 16 of the top 20 pharmaceutical companies have bought programs and 3 more are in the pipeline.
- Hospital AI use is spreading. The 5 November 2026 release says more than 190 health systems have purchased the AI suite. The Wolters Kluwer agreement of 20 October 2026 adds UpToDate clinical content to Doximity Ask.
- Cash generation funds a shrinking share count. Free cash flow was $91.3 million in the quarter and repurchases were $54.2 million (company release, 5 November 2026). Management said on the call that fully diluted shares fell 6% from a year earlier to 188 million.
- Retention is holding above 100%. On the 5 November 2026 call, net revenue retention was 103% overall and 106% for the top 20 hospital and pharmaceutical customers.
Bear case
- Growth is in the single digits. Revenue rose 4% in the quarter reported on 5 November 2026. Management's own full-year guide implies about 6% growth, and it expects the fourth quarter near the third-quarter rate.
- AI costs are compressing margins. Adjusted EBITDA margin fell to 50.9% from 59.8% (company release, 5 November 2026). On the call, management put non-GAAP gross margin at 88% and said most of the rise in cost of revenue came from scaling AI investment.
- AI search revenue ramps slowly. On the 5 November 2026 call, the chief financial officer expected a gradual ramp through calendar 2027 because pharmaceutical medical-legal reviews take time.
- Revenue rests on a small customer group. On the 5 November 2026 call, management said 124 customers spending more than $500,000 a year account for 82% of revenue. That group grew 3% from a year earlier.
- A securities suit alleges lost market share. Robbins LLP's 6 November 2026 notice says the suit alleges Doximity failed to disclose share losses to competitors with more favorable pricing and engagement models. The allegations are unproven.
Price setup
The shares closed at $33.22 on 11 November 2026, up 24.9% over three months from $26.59 on 13 August 2026. That close sits above the 50-day moving average of $29.47 and the 200-day moving average of $25.25, on adjusted daily closes. It is 38.5% below the 52-week intraday high of $54.04 set on 11 November 2025, and well above the 52-week closing low of $18.01 on 14 May 2026.
The report did not extend the rebound. The close fell from $34.67 on 4 November 2026 to $32.51 on 6 November 2026, the first session after the release, and has since held between $32.42 and $33.22.
Analyst targets set after the report straddle the price. Evercore ISI lowered its target to $33 and RBC Capital raised its target to $34 on 6 November 2026; Canaccord Genuity raised its target to $40 and Needham kept $41. Freedom Capital Markets raised its target to $32 with a Hold rating on 10 November 2026, and Barclays raised its target to $30 with an Equal-Weight rating on 11 November 2026.
Insider activity is planned selling. SEC Form 4 filings show director Timothy Cabral sold 10,721 shares at $35.00 on 5 November 2026 and director Kira Wampler sold 2,000 shares at $32.89 on 2 November 2026, both under Rule 10b5-1 plans.
Catalysts ahead
- 16 November 2026: Lead-plaintiff deadline in the Doximity securities class action. It sets who runs the case against Doximity. It is a procedural step and does not decide the allegations.
- ~31 December 2026 (est.): Annual pharmaceutical contract season closes. Management said most contracts are signed by the end of December; they set fourth-quarter visibility and revenue over the following year.
- ~4 February 2027 (est.): Fiscal third-quarter 2027 report. It shows revenue against the $195–196 million guide and whether the contract season and AI search lift the fourth-quarter outlook above the roughly 6% growth guided.
What would change the view
A daily close above $38.20, about 15% over the 11 November 2026 close, which would show the shares leading the S&P 500; a fiscal fourth-quarter revenue guide implying growth of 8% or more would also show the call wrong.
What it trades with
Doximity's revenue follows pharmaceutical marketing budgets and the annual contract season that closes in December, so its results move with drug-company spending decisions more than with the broad market. Its largest share moves have come around its own reports: SueWallSt's class-action notice cites declines of 13% on 7 November 2025, 17% on 6 February 2026 and 23% on 14 May 2026. The next report is expected in early February 2027, near the end of the three-month horizon.
The evidence, claim by claim (8)
- Fiscal second-quarter 2027 revenue was $174.5 million, up 4% from $168.5 million, against guidance of $170–171 million. Doximity Q2 FY2027 press release, SEC Form 8-K exhibit 99.1 · as of
- Fiscal second-quarter adjusted EBITDA was $88.9 million, down 12% from $100.8 million; margin 50.9% against 59.8%. Net income fell to $34.7 million from $62.1 million. Doximity Q2 FY2027 press release, SEC Form 8-K exhibit 99.1 · as of
- Full-year fiscal 2027 guidance is $678–683 million of revenue (6% growth at the midpoint) and $317–325 million of adjusted EBITDA; third-quarter guidance is $195–196 million of revenue. Doximity Q2 FY2027 press release and 5 November 2026 earnings call · as of
- AI search is an eight-figure bookings product; 16 of the top 20 pharmaceutical companies have bought programs and 3 more are in the pipeline. Doximity Q2 FY2027 earnings call · as of
- Net revenue retention was 103% overall and 106% for top-20 hospital and pharmaceutical customers; 124 customers above $500,000 of annual spend produced 82% of revenue. Doximity Q2 FY2027 earnings call · as of
- Free cash flow was $91.3 million and share repurchases $54.2 million in the quarter; cash and marketable securities totalled $713.2 million on 30 September 2026. Doximity Q2 FY2027 press release, SEC Form 8-K exhibit 99.1 · as of
- After the report, Canaccord Genuity raised its target to $40, RBC Capital to $34, Freedom Capital Markets to $32 (Hold) and Barclays to $30 (Equal-Weight); Evercore ISI cut to $33 and Needham kept $41. Analyst actions reported in company news, 6 November to 11 November 2026 · as of
- Director Timothy Cabral sold 10,721 shares at $35.00 on 5 November 2026 under a Rule 10b5-1 plan. SEC Form 4 filed 9 November 2026 · as of
Sources
- SEC EDGAR
- Doximity (DOCS) Q2 2027 Earnings Call Transcript · fool.com ·
- Doximity Announces Fiscal 2027 First Quarter Financial Results · secure.businesswire.com ·
- DOCS Class Action Lead Plaintiff Deadline is November 16, 2026 - Contact Robbins LLP About Leading the Case Against Doximity, Inc. · financialcontent.com
- DOCS Investor Alert: Doximity, Inc. Securities Class Action Notice - Contact SueWallSt · prnewswire.com
- DOCS INVESTOR ALERT: Doximity, Inc. Investors with Substantial Losses May Seek to Lead Class Action Lawsuit Before November 16, 2026 Deadline - RGRD Law · globenewswire.com ·
Related · shared themes
ZETA
Zeta Global Holdings
Zeta Global's shares hold a modest edge over the S&P 500 after the company beat its third-quarter guide and raised 2026 revenue guidance to…
U
Unity Software
Unity Software's advertising turnaround and reported takeover interest make the shares modestly more likely than not to beat the S&P 500…
EPAM
EPAM Systems
EPAM Systems is modestly more likely than not to beat the S&P 500 as its $1.8 billion buyback, including a $500 million UBS repurchase…
EVC
Entravision Communication
Entravision's ad-technology unit grew 133% in the third quarter, beating its own guide, and the shares have held the gain; the…
See also · stocks to watch