Doximity Stock is an Interesting Healthcare Play

Cloud-based healthcare community platform Doximity NASDAQ: DOCS stock may be put in a bottom as its trades down (-35%) for the year. Digital-first Doximity membership includes over 80% of U.S. doctors and 50% of all nurse practitioners and physician assistants. The Company added scheduling to its product suite by acquiring Amion which helped generate record use of its tax, e-signature, and telehealth tools. The Company includes all of the top 20 hospitals and pharmaceutical companies in the U.S. as clients. ROI measurements for its clients have come in over 10X which is leading to a 157% net revenue retention rate for fiscal 2022. The Company has experienced record usage of its products suite driven by the new normal of hybrid home office work schedules for doctors. Over 350,000 unique physicians and medical professionals in the quarter. Doximity strives to be the Bloomberg for doctors and the physicians' cloud in the U.S. Doximity works with half of the mega-brand newly launched drugs that sell over $100 million domestically, which it gets 5% of this healthcare professional marketing budget. Prudent investors looking for exposure in the healthcare sector outside of insurance or treatments can watch for opportunistic pullbacks in shares of Doximity.

Q4 Fiscal 2022 Earnings Release

On May 17, 2022, Doximity released its fiscal fourth-quarter 2022 results for the quarter ending March 2022. The Company reported an adjusted earnings-per-share (EPS) profit of $0.21 excluding non-recurring items versus consensus analyst estimates for a profit of $0.15, beating estimates by $0.06. Revenues rose 40.4% year-over-year (YOY) to $93.65 million, beating analyst estimates for $90.17 million. The Company authorized a $70 million share buyback program starting in fiscal Q1 2023. Doximity CEO Jeff Tangney commented, "We're proud to now serve over 2 million US healthcare professionals, including over 80% of US physicians and over 50% of Physician Assistants and Nurse Practitioners. This quarter, we added scheduling to our product suite with the acquisition of Amion, and saw record use of our fax, e-signature, and telehealth tools."

Mixed Guidance

Doximity lowered its fiscal Q1 2023 revenues to $88.6 million to $89.6 million versus $96.91 million consensus analyst estimates. However, the Company raised its fiscal full-year 2023 revenues to come in between $454 million to $458 million versus $452.35 million consensus analyst estimates.

Conference Call Takeaways

CEO Tangney highlighted the 40% YoY growth in the quarter and 66% growth for the year at $344 million. Doximity clients include the top 20 pharmaceutical companies and top 20 hospitals. Client ROI was 10 to 1 for pharmaceuticals and 13 to 1 for hospitals. This is helping drive a 157% net revenue retention rate. Adjusted EBITDA margins were 42% for Q4 and 44% for fiscal 2022. The Company ended fiscal 2022 with $798 million in cash and cash equivalents. The Company has surpassed over 2 million registered members as usage hit highs due to hybrid home office work schedules becoming the new normal for doctors. Its acquisition of Amion adds physician scheduling to its product suite. Amion powers over 200,000 U.S. physician schedules. Over 350,000 doctors and medical professionals used its telehealth tools in the quarter. He concluded,” The pandemic has definitively shown the market that a digital-first commercial model works. It’s not only more economically efficient for reaching doctors and thought leaders, but also can deliver faster adoption and blockbuster sales results.”

DOCS Opportunistic Pullback Levels

Using the rifle charts on the weekly and daily time frames provides a precise view of the landscape for DOCS stock. The weekly rifle chart downtrend stalled with the 5-period moving average (MA) turning flat at $34.06 followed by the 15-period MA at $42.46. The recent bounce peaked near the $34.90 Fibonacci (fib) level before pulling back. The weekly stochastic crossed up to test the oversold 20-band for either a break or rejection. The weekly lower Bollinger Bands (BBs) sit at $22.74. The weekly market structure low (MSL) buy triggers the $35.14 breakout. The daily rifle chart uptrend is attempting to reverse as the 5-period MA is falling at $35.68 towards the 15-period MA at $35.03 for a potential breakdown on the crossover. The daily stochastic formed a mini inverse pup down through the 80-band. The daily lower BBs sits at $28.80. The daily upper BBs sits at $39.80 with daily 50-period MA at $40.46. Prudent investors can watch for opportunistic pullback levels at the $31.73 fib, $29.67 fib, $27.06 fib, $26.02 fib, $23.76 fib, $22.00 fib, and the $19.51 fib level. Upside trajectories range from the $39.40 fib up to the $52.08 fib level.