Doximity Inc

Doximity, Inc. (NYSE: DOCS) provides a digital platform for United States (U.S) medical professionals. The Company's cloud-based platform provides tools to its members, which help them to collaborate with colleagues, coordinate patient care, conduct virtual patient visits, stay up to date with medical news and research, and manage careers.

Recent Financial and Business Updates:

• Fiscal Q1 2024 Financial Highlights for Doximity; Comparisons are drawn to the period ending June 30, 2022:
  • Revenue: Achieved USD 108.5 million in revenue, a 20% increase YoY from USD 90.6 million.
  • Net Income and Non-GAAP Net Income: Recorded net income of USD 28.4 million, compared to USD 22.4 million, with margins of 26.2% and 24.7%, respectively. Non-GAAP net income was USD 40.6 million versus USD 30.8 million, with margins of 37.5% and 34.0%.
  • Adjusted EBITDA: Posted adjusted EBITDA of USD 46.6 million, a 39% YoY increase from USD 33.5 million, with margins at 42.9% and 37.0%.
  • Diluted Net Income Per Share and Non-GAAP Diluted Net Income Per Share: Diluted net income per share stood at USD 0.13 versus USD 0.10, while non-GAAP diluted net income per share was USD 0.19 versus USD 0.14.
  • Operating Cash Flow and Free Cash Flow: Generated USD 57.2 million in operating cash flow, up 28% YoY from USD 44.8 million, and USD 55.6 million in free cash flow, an increase of 31% YoY from USD 42.6 million.
• Financial Outlook: Doximity projections for fiscal Q2 ending September 30, 2023:
  • Revenue between USD 108.5 million and USD 109.5 million.
  • Adjusted EBITDA between USD 44 million and USD 45 million.
• For the full fiscal year ending March 31, 2024, Doximity revised guidance:
  • Revenue projected between USD 452 million and USD 468 million.
  • Adjusted EBITDA expected to fall between USD 193 million and USD 209 million.
• Workforce Reduction: Doximity disclosed a plan to streamline operations and align resources on August 8, 2023. Around 100 employees, representing 10% of the workforce, will be laid off. Anticipated restructuring costs are USD 8 - 10 million, primarily incurred in Q2 of fiscal year 2024, with the reduction in force expected to conclude by Q3 of the same fiscal year.
  

Technical Observation (on the daily chart)

The price of DOCS stock has shown a consistent downward trend since February 02, 2023, correcting around 40.57%. Currently, the stock is around an important support zone of USD 22.00-USD 24.00, from where price has taken supports and resistances in the past, expectations of a short-term upward trend for the stock. The RSI (14 period) momentum indicator is in the oversold zone with a value of 21.87, with expectations of some consolidation or a further continuation of an uptrend. Moreover, the price is currently positioned below both the 50-day SMA and 200-day SMA trend-following indicators, which may act as dynamic short-term resistance levels.

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As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Buy’ rating has been given to Doximity, Inc. (NYSE: DOCS) at the current price of USD 23.68 as of August 11, 2023, 06:45 am PDT.

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing. 

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

How to Read the Charts?

The Yellow colour line reflects the 20-period simple moving average (SMA) while the blue line indicates the 200- period simple moving average (SMA). SMA helps to identify existing price trends. If the prices are trading above the 50-period and 200-period moving average, then it shows prices are currently trading in a bullish trend.

The Green colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

The Blue colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume as liquidity in stocks helps in easier and faster execution of the order.

The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices. 

The reference date for all price data, currency, technical indicators, support, and resistance levels is August 11, 2023. The reference data in this report has been partly sourced from REFINITIV. 

Abbreviations

CMP: Current Market Price

SMA: Simple Moving Average

RSI: Relative Strength Index

USD: United States dollar 

Note: Trading decisions require a thorough analysis by individual. Technical reports in general chart out metrics that may be assessed by individuals before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.

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