Doximity Inc

Doximity is accelerating investments in artificial intelligence to expand beyond its core physician engagement platform, with its AI Search business onboarding a first cohort across more than two dozen programs and driving an increase in fiscal 2027 revenue guidance. The company's clinical AI adoption is growing rapidly, with quarterly active workflow prescribers up more than 30% year over year and 165 signed health-system AI clients, including eight top Honor Roll hospitals. However, adjusted gross margin declined 300 basis points year over year to 88% in the first quarter due to higher AI compute costs, and management expects elevated AI spending to continue throughout fiscal 2027, with adjusted EBITDA margin guidance of 47%. Doximity's full-year revenue guidance of $671 million to $681 million represents only 5% growth at the midpoint, reflecting a sluggish pharmaceutical advertising market, while its top 20 customers achieved 112% net revenue retention and 127 customers generating over $500,000 annually accounted for 83% of total revenues. The Zacks Consensus Estimate for fiscal 2027 revenues is $675.7 million, implying 4.8% growth, and adjusted EPS is pegged at $1.33, a 12.5% decline from the prior year.

Truist Securities raised its price target on Doximity to $24 from $19 while reiterating a Hold rating. The firm now projects revenue of $673 million in fiscal 2027 and $716 million in fiscal 2028, up from prior estimates of $664 million and $695 million. Adjusted EBITDA was trimmed to $320 million for fiscal 2027 from $323 million, while fiscal 2028 nudged up to $347 million from $344 million. The $24 target is based on 10 times Truist's calendar 2028 adjusted EBITDA estimate, rolled forward to an 18-month target. Doximity shares rose 0.46% premarket and are up roughly 14% over the past week but still down about 60% over the past year.

Doximity raised its revenue outlook for the second quarter and full fiscal year 2027, citing rapid uptake of its clinical AI tools. The company now expects second-quarter revenue between US$170 million and US$171 million, and full-year revenue between US$671 million and US$681 million. This follows fiscal first-quarter revenue of US$156.62 million, up from US$145.91 million a year earlier, though net income and earnings per share declined. The stock has seen a very large rebound after a tough year, and the raised guidance underscores management's confidence in monetizing AI-powered products.

Doximity, Cloudflare, and Atlassian led premarket movers after reporting quarterly results that beat expectations. Doximity shares soared 66% after the professional medical networking platform reported fiscal first-quarter 2027 revenue of $156.6 million, above the $151.7 million consensus, and raised its full-year financial targets. Atlassian surged 31% after delivering a fiscal fourth-quarter earnings beat with adjusted EPS of $1.87 versus the $1.50 consensus and revenue of $1.77 billion, representing 28% year-over-year growth. Cloudflare rose 16.2% to $330.51 after raising its full-year 2026 revenue forecast to between $2.86 billion and $2.87 billion, citing resilient demand linked to artificial intelligence. Other notable gainers included PubMatic, Figs, Twilio, Airbnb, Hertz, QuinStreet, and JFrog, all of which advanced on better-than-expected results. On the downside, The Trade Desk tumbled more than 27% after its second-quarter revenue of $715.1 million missed estimates and it guided for a third-quarter revenue decline of about 12%, while Sezzle plunged 23% on a warning that revenue growth could slow to around 30% in the second half of 2026.

Wall Street analysts have set price targets implying returns above 20% for Doximity, Crane NXT, and Charles Schwab. Doximity, a digital platform for physicians, has a consensus target of $25.42, suggesting a 24.2% upside from its $20.47 share price, supported by 25.5% annual sales growth and an 89.1% gross margin. Crane NXT, a payment and authentication technology provider, carries a $66.83 target for a 36% implied return, backed by 15.3% average backlog growth and projected 16.3% revenue acceleration. Charles Schwab, the wealth management and brokerage firm, has a $115.85 target implying 28.2% upside, driven by 15.9% annual revenue growth and a 14.9% return on equity.