Raymond James sees a rosy outlook ahead for Doximity . The bank upgraded the digital platform for medical professionals to a strong buy from outperform. While it lowered its price target to $65 from $75, that still implies roughly 40% upside from Thursday’s close. Analyst Brian Peterson wrote that he was upgrading the stock following a “significant dislocation” after posting its fiscal second-quarter results in May. He added that at 25 times free cash flow, the stock looks “too compelling to ignore.” DOCS YTD mountain DOC YTD chart “Doximity has all 3 Ms of a core long-term holding (Moat, Margin, and Management Team), and we think the recent pullback that has shares at a discount to the vertical software group is too great to ignore,” he said. “We’re also surprised by the company’s significant discount to other vertical software names, as the company has historically traded at a premium to the group.” While some investors have questioned the strong seasonality of Doximity’s business this, questioning if this could last, Peterson wrote that “seasonal shifts are not indicative of longer-term growth rates.” “We actually think the long-term growth visibility/durability is improving,” he said. “While the company has consistently grown at 2-3x digital budgets, ramping workflow adoption, multi-product expansion and client portal benefits all suggest that these share gains are durable in nature.” The analyst also sees artificial intelligence monetization as a catalyst that could help sustain Doximity’s market growth going forward. Shares of Doximity have slipped 13% this year.
