Jefferies Raises Price Target on Doximity Inc. as Company Expects Above-Market Growth
Global financial services company Jefferies has adjusted its outlook on Doximity Inc., raising the price target on the company’s shares from $30.00 to $35.00 while reiterating a Buy rating. This adjustment comes in anticipation of Doximity’s expected above-market growth in calendar year 2024.
Jefferies expressed optimism about Doximity’s future, taking into account the company’s impressive third fiscal quarter results and its projection for continued growth that outpaces the market. The firm’s updated model reflects a promising initial consensus for fiscal year 2025, indicating reasonable revenue growth expectations and a potential for EBITDA margin expansion.
Furthermore, Doximity’s solid balance sheet and strong free cash flow position the company favorably for strategic maneuvers, including the potential for using opportunistic share repurchases to add value for shareholders.
Jefferies emphasizes Doximity’s market capitalization at $5.6 billion, underscoring significant investor confidence in the company. Additionally, Doximity’s gross profit margins for the last twelve months as of Q3 2024 stand at an impressive 88.94%, showcasing robust cost management and pricing power. The company has also achieved healthy revenue growth, with a 16.58% increase in the last twelve months as of Q3 2024.
However, investors should take note of Doximity’s high valuation multiples. The P/E ratio currently sits at 42.04, while the adjusted P/E ratio for the last twelve months as of Q3 2024 is 38.74, indicating that the stock is trading at a premium.
Analyst comment
Overall, this news is evaluated as positive. As an analyst, it is predicted that the market for Doximity Inc. will continue to experience above-market growth in the coming years. This is supported by Jefferies’ price target increase, the company’s strong financial performance, and its favorable position for strategic maneuvers. However, investors should be cautious of the high valuation multiples, indicating that the stock is trading at a premium.
