Doximity (DOCS) to Report Q1 Earnings: What's in the Offing?

Doximity, Inc. DOCS is scheduled to report first-quarter fiscal 2023 results on Aug 4, after the closing bell.

In the last-reported quarter, the company’s earnings of 21 cents per share surpassed the Zacks Consensus Estimate by 50%. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on all occasions, delivering an earnings surprise of 75.2%, on average.                 

Let’s see how things have shaped up for Doximity prior to this announcement:

Factors at Play

Per the fiscal fourth quarter of 2022 earnings release, the ongoing shift to digital among Doximity’s clients led to a strong performance, which is likely to have continued in the fiscal 2023 first quarter.

Per management, the company’s existing clients generated a record surge in net revenue retention rate (for the trailing 12 months) in the fiscal fourth quarter of 2022. Further, Doximity has been witnessing strength in its fax, e-signature and telehealth products, which have been recording robust adoption by clients over the past few months. These momentums are likely to have sustained in the to-be-reported quarter, thereby driving up revenues.

Doximity, Inc. Price and EPS Surprise

Doximity, Inc. Price and EPS Surprise

Doximity, Inc. price-eps-surprise | Doximity, Inc. Quote

Doximity (which operates through a subscription-based business model) had worked with Biohaven Pharmaceutical Holding Company Ltd. BHVN to launch their novel migraine drug, NURTEC ODT, during the pandemic, through digital-first strategy. This has helped Biohaven to grow sales of its oral migraine drug significantly amid competition from several industry heavyweights. The robust growth for its lead drug by using Doximity’s digital platform is likely to have led BHVN to purchase expanded subscriptions, driving DOCS’s top line during the soon-to-be reported quarter.

In February, Doximity completed the Amion buyout, which is expected to expand its physician cloud platform. This is also likely to have driven its performance in the to-be-reported quarter.

During the fiscal 2022 fourth-quarter earnings call, Doximity confirmed that its fiscal first quarter results were exceptionally high as it gained from a significant pull forward of demand. Although the company is hopeful that owing to the continued shift of its customers to digital means, its historical trend in which its first quarter reflects the lightest growth raises apprehensions about its fiscal first quarter performance. Also, a tougher year-over-year comparison is likely to weigh on the top line.

The Estimate Picture

For first-quarter fiscal 2023, the Zacks Consensus Estimate for total revenues is currently pegged at $89.3 million, indicating an improvement of 22.9% from the prior-year reported number.

The consensus estimate for earnings per share (EPS) is pegged at 11 cents, flat compared with the prior-year reported number.

What Our Model Suggests

Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) along with a positive Earnings ESP, has higher chances of beating estimates. This is not the case here, as you can see:

Earnings ESP: Doximity has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #3.

Stocks Worth a Look

Here are a few medical stocks worth considering, as these have the right combination of elements to beat on earnings this reporting cycle:

Centessa Pharmaceuticals plc CNTA has an Earnings ESP of +2.70% and a Zacks Rank of 2. CNTA has an estimated growth rate of 20.6% for 2023.

Centessa Pharmaceuticals’ earnings surpassed estimates in two of the trailing four quarters and lagged the same in the other two, with the average being 6.2%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Sight Sciences, Inc. SGHT has an Earnings ESP of +14.29% and is a Zacks #2 Ranked stock. SGHT has an estimated growth rate of 23.7% for 2022.

Sight Sciences’ projected EPS growth currently stands at 23.6%, compared with the industry’s 5.5%.

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Biohaven Pharmaceutical Holding Company Ltd. (BHVN) : Free Stock Analysis Report
 
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Doximity, Inc. (DOCS) : Free Stock Analysis Report
 
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