Doximity – a company that has been referred to as the “LinkedIn of medical professionals” is up over 25% so far today.
The social networking site allows doctors to connect with patients for evaluations and check-ins, network with peers, stay up to date on news and research, and more. What happened that resulted in share prices moving back in the right direction after a year of underperformance?
Two big things: impressive earnings and the announcement of a stock buyback. We’ll cover the implications of both below, starting with the 2nd quarter earnings release.
Revenue for the fiscal 2nd quarter grew 29% to $102.2 million. This is up substantially from the same period a year ago when revenue came in at just $79.35 million. The company also exceeded expectations on EPS at $0.17/share compared to $0.16/share. With that said, net income did drop to $26.3 million compared to $36.1 million a year ago.
Looking ahead to the future, Doximity executives anticipate 3rd quarter revenue to come in between $110.7-$111.7 million – another quarter-to-quarter increase. With all this said, the announcement of Doximity’s board approving a stock buyback program is what really stole the show Thursday after-hours.
The company has been approved to repurchase up to $70 million periodically over the next 12 months. This indicates that despite the drop in profits this quarter, Doximity has ample cash on hand – and is looking to reinvest in itself. The number of outstanding shares for DOCS is set to decrease which has sent shares up.
And, it couldn’t have come at a better time. In the past year DOCS stock still sits at a loss of 54%. The rock bottom for the last year was Nov 9 when the stock sat at just $24/share. The hype around this news has sent the stock’s price back up to $32.82 as of Nov 11 at 12 PM EST.
But will this trend persist – or is this a fleeting success for DOCS? To give you a clear answer on what your next move should be with this stock, take a look at what we found through the VectorVest stock analysis software below. A clear buy, sell, or hold recommendation awaits you…
DOCS Has Excellent Timing but Displays Poor Safety – Does One Outweigh the Other?
VectorVest transforms the way you uncover and assess opportunities in the stock market forever. No longer are you forced to analyze countless charts and indicators, glued to your screen all day. Instead, you can glean meaningful insights with just three simple, easy-to-understand ratings. These are relative value (RV), relative safety (RS), and relative timing (RT).
These ratings sit on a scale of 0.00-2.00, with 1.00 being the average. Anything higher than the average indicates overperformance and vice versa. And based on these three ratings, the system is actually able to provide you with a clear buy, sell, or hold recommendation – no more guessing games, no more emotion. Just sound, tried-and-true investment principles without any of the heavy lifting. As for DOCS, here’s the current situation:
- Fair Upside Potential: The RV rating analyzes a stock’s long-term price appreciation potential 3 years out – giving you a better understanding of the true value a company has. As for DOCS, the RV rating of 0.91 is fair. But, the stock is overvalued at its current price – with a current value of just $11.34.
- Poor Safety: An indicator of risk, the RS rating takes a look at a company’s financial consistency and predictability, debt-to-equity ratio, and business longevity. Right now, DOCS has poor safety with an RS rating of just 0.73.
- Excellent Timing: As you can see looking at the DOCS’ price movement in the past 48 hours, there is a strong price trend moving in the right direction. And the excellent RT rating of 1.42 reflects that. This rating analyzes the price trend’s direction, dynamics, and magnitude day over day, week over week, quarter over quarter, and year over year.
These three ratings work out to an overall VST rating of 1.09 for DOCS – which is fair. But does that mean it’s time to buy – or should you wait to see how this trend holds over the coming days? You can make your next move with confidence by analyzing the stock free at VectorVest where you get a clear buy, sell, or hold recommendation.
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VectorVest advocates buying safe, undervalued stocks, rising in price. As for DOCS, it has poor safety, but fair upside potential and excellent timing.
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