Why Doximity Stock Plummeted Today

1 hour ago 2

Josh Kohn-Lindquist, The Motley Fool

Fri, February 6, 2026 astatine 11:03 AM CST 3 min read

Shares of the Doximity (NYSE: DOCS) -- the No. 1 integer level for aesculapian professionals -- are down 24% arsenic of 11 a.m. ET connected Friday aft the institution reported third-quarter net Thursday afternoon. Sales and net per stock exceeded Wall Street's expectations, but management's guidance for 4% gross maturation successful Q4 sent the banal down sharply. Doximity's income maturation has slowed from 23% successful Q3 past twelvemonth to 10% successful Q3 this year, truthful the upcoming quarter's blimpish guidance truly spooked the markets. Making matters worse, nett income declined from $75 cardinal successful Q3 2025 to $62 cardinal this twelvemonth arsenic selling expenses roseate 27% and the institution invested heavy successful its AI infrastructure.

That said, I deliberation Doximity's semipermanent concern thesis remains intact. Most of this quarter's volatility comes from shorter-term issues. For example, pharmaceutical companies are among Doximity's largest customers due to the fact that they advertise with the company. These pharma companies proceed to conflict industry-specific headwinds, with 16 of the 20 largest pharma companies precocious signing most-favored-nation agreements, resulting successful delayed bookings with Doximity arsenic they waited for clarity. This hold looks atrocious close now, but committee subordinate Tim Cabral highlighted however this was simply a timing shift, explaining, "This is evident successful our January pharma bookings maturation rate, which is the champion we've seen since going public." The income slowdown successful Q3 and Q4 shouldn't beryllium a motion of a semipermanent problem.

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Also, portion AI spending is presently a headwind to Doximity's financials, its adoption rates look promising. Over 100 of the apical U.S. wellness systems started utilizing Doximity's AI products, including implicit 300,000 prescribers successful Q3. However, Doximity did not see immoderate AI gross successful its guidance. As the institution afloat launches and monetizes its commercialized AI suite aboriginal this year, maturation rates and margins could improve. Currently trading astatine conscionable 17 times escaped currency travel -- but utilized by 85% of U.S. physicians and two-thirds of physicians' assistants and caregiver practitioners -- Doximity remains a promising maturation stock, and I'll beryllium looking to adhd to it soon.

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