DOCS stock lower as Wall Street cuts target after soft guidance (NYSE:DOCS)
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Despite top-line and bottom-line beats with its 4Q FY22 financials yesterday, Doximity (NYSE:DOCS) has lost ~13% in the pre-market Wednesday after the online medical platform provider’s outlook for 1Q fiscal 2023 fell short of Street forecasts.
Several analysts have lowered their price targets on the stock in response. Bank of America trimmed the price target on Doximity (DOCS) to $36 from $55 per share, pointing to lower-than-expected 1Q revenue and EBITDA forecasts despite revenue and EBITDA beats for the quarter.
“It seems reasonable that after two years of material mix shifts toward digital, live event spend is likely to take a step forward in CY22, even if at lower levels than pre-COVID,” the analysts led by Allen Lutz wrote as they reiterated the Neutral rating on the stock.
The firm continues to cite the potential of the company’s business model to gain share in the long-term, with strong cash flows. However, the analysts point to the lack of near-term clarity on the company’s growth normalization, including the trajectory in the second half of the year.
Meanwhile, Morgan Stanley argues that the weaker 1Q outlook eclipsed other positive developments as they slashed the price target to $35 from $55 per share.
The analysts led by Craig Hettenbach highlight, among other things, better than expected FY23 EBITDA guidance and $70M share buyback announced by the company.
“Key debate is on the cadence through FY23, as Q1 revenue was guided 8% below the Street and FY23 guided 1% ahead,” they added, maintaining the Equal-weight rating on the stock.
Guggenheim and Jefferies also slashed the price target reiterating the Buy rating on Doximity (DOCS).
Read: “Doximity is a free cash flow printing machine,” Seeking Alpha contributor Michael Wiggins De Oliveira argued in a Bullish thesis on the stock on Wednesday.
