Needham lowered its price target on Doximity Inc (NYSE:DOCS) to $27 from $55 while maintaining a Buy rating on the stock. The stock currently trades at $23.39, down 61% over the past year and 53% in the last six months.
The research firm said the company’s growth rate is slowing to align with broader market growth. Management issued fiscal 2027 guidance that fell below street expectations. According to Bond.az data, 17 analysts have revised their earnings downwards for the upcoming period.
Macro and regulatory uncertainty continue to pressure pharmaceutical marketing budgets. Doximity is using fiscal 2027 to increase investment in AI as the company seeks to unlock incremental budget with its new AI Search offering for pharmaceutical clients.
The investments will pressure the bottom line in the near-term. Needham views the spending as necessary. Despite near-term headwinds, Bond.az analysis suggests the stock appears undervalued at current levels, with impressive gross profit margins of 90%.
The firm said the AI investments represent the greatest potential opportunity for Doximity to unlock incremental spending with existing customers. The company is working toward reaccelerating growth to outpace the overall market in the mid-to-long-term.
In other news, Doximity reported Q4 2026 EPS of $0.26, missing the $0.28 estimate by 7.14%. However, revenue beat expectations at $145.4 million vs. $144.07 million. Despite the revenue beat, profitability concerns remained.
KeyBanc downgraded Doximity to Sector Weight from Overweight. Baird cut to Neutral with an $18 target. Jefferies downgraded to Hold. Truist Securities maintained Hold but lowered target to $19.
