Doximity, Inc. (DOCS): what the price requires
At today's price, Doximity, Inc. (DOCS) is priced for +17.7% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/DOCS
Headline
| Field | Value |
|---|---|
| Ticker | DOCS |
| Company | Doximity, Inc. |
| Current price | $22.06/sh |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 9.5% |
| Operating margin today | 40.4% |
| Margin compression implied | -30.9pp |
| Implied growth | 17.7% |
| Multiple paid | 14x operating income |
The operating-margin requirement is derived from the framework's value band at year 6, a separately labeled basis from the headline growth/duration solve.
Solve inputs: computed at a 11.5% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~5.5pp.
Reconcile: at the x-ray's 9.3% required return this reads ~5.5%/yr; the models below use their own rates.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | -0.74σ |
| sustained it ~5 years at this level | 46% |
| implied end-window share | 0% |
Valuation X-Ray
The price is justified by relative-multiple and growth-DCF; asset-based/earnings-power land below the price.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 1.77x | 4 | expensive |
| Earnings | 1.96x | 4 | expensive |
| Relative | 0.74x | 3 | justifies |
| Growth | 0.70x | 3 | justifies |
Families that justify the price: Relative, Growth Families that call it expensive: Asset, Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.2%); the inversion above states its own rate.
Per-Model Detail (n=14)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $44.58 | 0.49x | yes | FCF base $0.3B, growth 13% (input: historical growth), terminal g 4.0%, WACC 9.2%, 6yr projection |
| DCF Exit Multiple | Growth | $31.58 | 0.70x | yes | Exit EV/EBITDA: 16.3x / 18.3x / 20.3x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | $34.47 | 0.64x | yes | P/E 35x (static sector reference · 2026-04), scenarios: 29.0x / 35.0x / 41.0x (bear / base = reference held flat / bull), EV/EBITDA 25x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $10.64 | 2.07x | yes | BV/sh $4.77, ROE (TTM) 20.6%, ke 9.3% |
| Two-Stage Excess Return | Asset | $15.74 | 1.40x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $20.97 | 1.05x | yes | Rev $0.6B, growth 13% (input: historical growth; tapered), Terminal P/S: 5.6x / 6.8x / 8.0x (bear / base = today's held flat / bull, cap 8x) |
| Growth-Adjusted P/E | Relative | — | — | no | — |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $6.57 | 3.36x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.17B × (1−40%) / WACC 9.2% → EPV (no growth) |
| Residual Income | Asset | $15.09 | 1.46x | yes | BV $4.77 + 5yr PV of (ROE (TTM) 20.6% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $10.26 | 2.15x | yes | √(22.5 × EPS $0.98 × BVPS $4.77) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $29.73 | 0.74x | yes | EBITDA $0.23B × sector EV/EBITDA 25.0x |
| FCF Yield | Earnings | $18.67 | 1.18x | yes | FCF $326.5M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $12.07 | 1.83x | yes | SBC-adj FCF $0.20B (FCF $0.33B − SBC $0.12B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $0.82 | 26.90x | yes | EPS $0.98 × (8.5 + 2×-4.4%) × (4.4 / 5.3%) (excluded from median) |
| ROIC-Justified P/B | Asset | $1.02 | 21.63x | yes | BV $4.77 × (ROIC 2.0% / WACC 9.2%) (excluded from median) |
| P/Sales Sector | Relative | $25.89 | 0.85x | yes | Revenue $0.64B × sector P/S 8.0x |
| PEG Fair Value | Relative | — | — | no | — |
| Earnings Yield | Earnings | $10.59 | 2.08x | yes | EPS $0.98 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net cash | $748.6m |
| Net debt / NOPAT (after-tax) | -4.66x (net cash) |
| Net debt / operating income (pre-tax) | -2.77x (net cash) |
| Share count CAGR (buyback) | -2.0% |
| Burning cash | no |
Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.
Bullet Takeaways
Doximity is the largest professional network for US physicians, with roughly 85% of doctors registered, and it monetizes that reach mainly through pharmaceutical marketing. Operating margin runs about 33% and the company is debt-free with about $749 million of cash.
At about $20 the price inverts to roughly 15% operating-profit growth a year, which the relative-multiple and growth-DCF methods support while the asset and earnings-power frames call it expensive.
The stock has fallen as margins compressed on rising AI compute costs and pharma budgets stayed soft. Fiscal 2026 revenue grew 13% to $644.9 million, but fourth-quarter adjusted EPS fell about 32% year over year.
Bull Case
The structural advantage that defines Doximity is its physician network, and it is a genuine one. The company is the largest professional medical network in the United States, with more than 3 million registered members representing roughly 85% of US physicians. Its filings describe an extensive and dynamic database of US physician information, with updated profiles, secure communication, workflow tools, and vast searchable data that together form a valuable competitive strength (Doximity FY2025 10-K, accession 0001516513-25-000056). That kind of near-universal penetration of a hard-to-reach, high-value audience is the moat: pharmaceutical companies and health systems need to reach doctors, and Doximity is where the doctors are. Once a professional network reaches the entire profession, a competitor cannot easily replicate it.
The economics that flow from the moat are excellent. Operating margin runs about 33%, return on equity is 20.6%, and the company is debt-free with about $749 million of cash and roughly $317 million of annual free cash flow. Fiscal 2026 revenue grew 13% to $644.9 million, with operating cash flow up 19%. This is not a cash-burning growth story; it is a highly profitable platform throwing off real cash, which is rare for a company still expanding its product surface.
The AI layer is the new growth vector built on the same network. Doximity is rolling out clinical AI tools, including the ambient notetaking tool Scribe and the clinical assistant and medical search engine Ask, with nearly half of providers using its clinical AI in the most recent quarter and prompts per user nearly doubling in a few months. Quarterly active prescribers on its workflow platform topped 800,000, up about 30% year over year, the largest jump it has recorded. New partnerships, including embedding its AI suite into Aledade's primary-care platform, and a new pharma-search advertising channel, extend monetization. The bull thesis is that the deepest physician network in the country is layering sticky AI tools on top, deepening engagement and opening new revenue while staying highly profitable, and that at $20 the market is underpricing that durability.
Bear Case
The disruption risk is real and the company names it directly: despite a scaled and differentiated platform, Doximity says it faces intense competition across different aspects of its business from a number of companies (Doximity FY2025 10-K, accession 0001516513-25-000056). The threat comes from two directions. On monetization, pharmaceutical marketing dollars can move to other digital channels, to the electronic-health-record vendors that also sit in front of doctors, and to point-of-care platforms; pharma budgets are not captive to Doximity. On the AI front, the clinical-AI market is suddenly crowded, with EHR-embedded assistants and dedicated medical-AI startups all racing to put tools in front of physicians. Doximity's network advantage in advertising does not automatically translate into an AI advantage, and the companies building AI directly into the clinical workflow may reach the doctor at a more useful moment.
The second concern is that the business is more cyclical than its SaaS-like multiple implies. Doximity is fundamentally an advertising platform: most revenue comes from pharmaceutical marketing, which is discretionary and sensitive to drug-launch cycles, regulatory shifts, and macro budget pressure. The company has flagged that pharma marketing budgets remain under pressure, with the broader market expected to grow at or below 5% this year. Fourth-quarter fiscal 2026 revenue grew only 5%, a sharp deceleration from the mid-teens, and adjusted EPS fell about 32% year over year as non-GAAP gross margin slipped from 91% to 89% on rising AI compute costs. An advertising business with decelerating growth and compressing margins is a different risk than a steadily compounding subscription business.
The valuation reflects a stock priced for re-acceleration that has not yet arrived. The asset-based and earnings-power methods land in the single digits to mid-teens, well below the price, so the stock is not cheap on what it earns at zero growth; only the growth-dependent and relative methods support it. Management has chosen to spend heavily on AI, calling fiscal 2026 an AI investment year, which is the right long-term move but pressures near-term margins and earnings, the very metrics that justify the multiple. The bet at $20 is that growth reaccelerates back toward double digits and that the AI spending pays off before the margin compression and pharma-budget softness redefine the story, and the bear case is that a network moat in advertising does not guarantee a win in clinical AI against well-funded competitors.
Valuation
At about $20 the price inverts to roughly 15% operating-profit growth a year over five years, with implied margin near 11.5% against today's 33%. The solve runs at an 11.5% cost of capital, and it is moderately sensitive: each percentage point of cost of capital moves the implied growth by roughly 5.2 points. The implied pace is within range of what the company has delivered, so the embedded assumption is reasonable, with the question being whether growth reaccelerates from the recent deceleration.
The model X-ray splits between cautious and optimistic. The asset-based methods land in the $10 to $16 range off a $4.77 book value, and the earnings-power value at zero growth is near $7, all below the price, reflecting that a 33% margin and a 20.6% return on equity still produce a low value if you assume no growth. The relative methods land above the price, with the sector P/E near $34 and EV/EBITDA near $30, and the FCF-yield method near $19, close to the price. The growth methods straddle, with the perpetual-growth DCF near $45 and the exit-multiple DCF near $30.
The pattern is a high-quality, profitable platform priced fairly to slightly cheap if growth holds, but with no cushion on its assets at zero growth. The bet at $20 is that the network monetization and the AI rollout reaccelerate growth toward the implied mid-teens while margins stabilize, not that the shares are cheap on a no-growth basis, where they are not.
Catalysts
Fiscal fourth-quarter and full-year 2026 results, reported May 13, were the most recent catalyst and the stock fell on them. Full-year revenue grew 13% to $644.9 million with operating and free cash flow up 19%, but fourth-quarter revenue grew only 5% to $145.4 million and adjusted EPS fell about 32% year over year to $0.26, as non-GAAP gross margin slipped from 91% to 89% on rising AI compute costs. Quarterly active prescribers topped 800,000, up about 30%, and nearly half of providers used the clinical AI.
The forward catalysts center on the AI rollout and pharma-budget recovery. Management has called fiscal 2026 an AI investment year, scaling Scribe, the Ask clinical assistant, and the physician-review feature PeerCheck, and has signed partnerships including embedding its AI suite into Aledade's platform and launching a pharma-search advertising channel. The watch items are whether revenue growth reaccelerates back toward double digits as analysts expect, the trajectory of margins as AI compute costs scale, adoption and engagement of the clinical AI tools, the recovery of pharmaceutical marketing budgets, and competitive moves from EHR-embedded and standalone medical-AI providers.
Peer Cohorts (Per Segment, With Filing Citations)
Cloud-based digital platform for medical professionals (single operating segment) (reported)
- VEEV (Veeva Systems Inc.)
- (no filing in the citation store)
- HNGE (Hinge Health, Inc.)
- (no filing in the citation store)
- WAY (Waystar Holding Corp.)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.