Doximity Shares Slide 11.6% to Record Low After Wells Fargo’s $18 Target
Doximity shares slumped 11.6% to a record low after Wells Fargo cut its rating to Equal Weight with an $18 target implying 23% downside. Q4 revenue rose 5% to $145.4 million, but EPS of $0.26 missed estimates and gross margin fell to 89% on higher AI compute costs.
1. Wells Fargo Downgrade
Wells Fargo cut Doximity’s rating to Equal Weight and set an $18 price target implying a 23% downside.
2. Mixed Q4 Financial Performance
Doximity reported Q4 revenue of $145.37 million, up 5% year-over-year, generated a record $107 million in free cash flow, but earnings per share of $0.26 missed the $0.28 consensus.
3. AI Investment Pressures Margins
The company is in an AI investment year, driving higher compute expenses that trimmed non-GAAP gross margin to 89% from 91% a year earlier.
4. Shares Plunge to Record Low
Shares dropped $3.06, or 11.57%, to $23.39, the lowest closing level on record following the downgrade and outlook concerns.