Doximity, the Healthcare sector company, was revisited by a Wall Street analyst today. Analyst Anne Samuel from J.P. Morgan downgraded the rating on the stock to a Sell and gave it a $62.00 price target.
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Anne Samuel has given her Sell rating due to a combination of factors impacting Doximity’s stock. Despite Doximity’s strong position in the healthcare professional network and its high profitability, there are concerns about the sustainability of its current valuation. The company’s enterprise value to EBITDA multiple is significantly higher than its peers in the Vertical SaaS sector, which suggests that the stock is trading at a premium that may not be justified by its growth prospects.
Additionally, the visibility of Doximity’s growth is clouded by uncertainties in the pharmaceutical digital advertising market, which is a major revenue source for the company. The shift to digital advertising has been beneficial, but the growth is heavily dependent on external factors such as clinical trial outcomes and regulatory changes. Given these uncertainties and the excessive valuation, Anne Samuel has downgraded Doximity to a Sell rating within the context of the broader Vertical SaaS universe.
In another report released on October 1, Goldman Sachs also downgraded the stock to a Sell with a $64.00 price target.