DOCS: Budget Flush And Ad Shift Will Drive Shares Higher

Analysts have lifted their Doximity fair value estimate to $83.00 from $78.58, reflecting stronger expected revenue growth and improving long term growth visibility, which they believe more than offset lower margin assumptions and a higher required return.

Analyst Commentary

Bullish analysts highlight that the recent pullback in Doximity shares has created a compelling entry point, with the stock now trading at what they view as an unjustified discount to the broader vertical software peer group. They argue that this dislocation, combined with improving fundamentals, supports both the recent fair value increase and a constructive medium term total return profile.

Recent field checks also point to better than expected growth trends in the near term, particularly in the calendar third quarter, with indications that demand is reaccelerating into year end. This backdrop, together with strengthening visibility into 2026, underpins the view that Doximity can defend and potentially expand its premium valuation as execution improves.

At the same time, there is growing confidence that a year end budget flush can act as a catalyst for upside to current revenue expectations, especially as healthcare marketers reallocate spend within digital channels. Bullish analysts believe that this dynamic, layered on top of an increasingly recurring customer base, could drive a meaningful inflection in top line momentum.

In parallel, some see Doximity's strategy shift toward healthcare professionals as structurally positive for the growth outlook. As regulatory changes introduce friction into traditional direct to consumer advertising, Doximity's position as a targeted, professional facing platform is viewed as increasingly strategic, supporting both higher sustained growth and greater durability of advertising demand.

Bullish Takeaways

• Bullish analysts view the recent selloff as overdone, arguing that the current share price implies an excessive discount to vertical software peers relative to Doximity's improving growth visibility.
• Channel checks indicating better than expected growth in the near term, particularly from video and workflow modules, are seen as evidence that execution is strengthening and can support renewed revenue acceleration.
• Expected upside from a robust year end budget flush is framed as a near term catalyst that could drive revenue and earnings above current consensus, reinforcing the higher fair value and supporting multiple expansion.
• The shift in marketing dollars away from direct to consumer advertising toward healthcare professionals, aided by regulatory changes, is viewed as a structural tailwind that can sustain double digit growth and justify higher long term valuation assumptions.

What's in the News

• Doximity issued new quarterly guidance for the third quarter ending December 31, 2025, calling for revenue between $180 million and $181 million, reflecting management's stated expectations for near term demand trends (company guidance).
• The company updated its full year fiscal 2026 outlook, now projecting revenue between $640 million and $646 million, which it characterizes as consistent with sustained double digit top line growth (company guidance).
• From July 1, 2025 to September 30, 2025, Doximity repurchased 355,238 shares for $21.89 million, completing a broader buyback program totaling 4,496,467 shares for $220.21 million, which the company describes as part of its approach to shareholder returns (company filing).

Valuation Changes

• Fair Value Estimate has risen moderately to $83.00 from $78.58, reflecting higher anticipated growth despite more conservative margin assumptions.
• Discount Rate has increased slightly to 8.20 percent from 7.42 percent, indicating a higher required return and marginally greater perceived risk.
• Revenue Growth has risen to approximately 14.5 percent from 12.5 percent, signaling stronger expected top line expansion.
• Net Profit Margin has fallen significantly to about 34.4 percent from 49.1 percent, incorporating more cautious long term profitability expectations.
• Future P/E has increased meaningfully to roughly 62.1x from 47.3x, implying a higher valuation multiple on forward earnings.