Doximity Earnings: A Minor Speed Bump; Rule Of 58, Lots Of Upside

I’ve lowered my target to $85 by summer 2026, but I’m even more confident in DOCS at these levels. I’ll happily recommend buying here—this kind of balance sheet and valuation is too rare to ignore.

Investment Thesis

Doximity's (DOCS) guidance ahead disappointed, as the business is growing slower than I had expected.

Before overreacting and calling it a day, consider this. Not only does Doximity's next quarter guidance point to the company reporting around a Rule of 58, which is much higher than the typically coveted Rule of 40, but also the business is still attractively priced, at 29x forward free cash flow.

Here's my best big of advice. The market is still a bit shaky right now. And a lot can happen in 30 days. Reacting in fear now, is not constructive.

Even if I'm wrong on DOCS, which I don't think I am, selling into maximum fear would never allow me to outperform in 2025.

All in all, I will downgrade my price target to $85 by summer 2026, but I continue to fervently believe that the market will return to bidding DOCS higher.

This is a very compelling investment, with no debt, rock-solid balance sheet with 10% of its market cap as cash and marketable securities, while generating very strong free cash flows.

I am bullish on DOCS and recommend buying this weakness, as I know that by next summer the stock is likely to be a lot higher than $50 per share.

Important Context

My Inflection investing strategy is not about chasing perfection. I deliver outperformance. This doesn't happen every 90 days. But outperformance absolutely does happen.

The problem is that many investors require proof that it works every week, and they get disenchanted when some companies report an underwhelming quarter.

On top of that, they believe that if they invest with a 10% stop loss, they are protecting their capital. Nothing could be further from the truth. The only thing that's happening is that they are stopping themselves from wealth building.

Businesses are organic. And investors' expectations are highly mercurial. Combined together, things get explosive. Take my advice, don't let the market's reaction led your own portfolio's performance.

If the market was always right, then why does the S&P500 only generally compound at 10%? With no exaggeration, I outperform the market.

Again, not every quarter, but give me 6 months, and I can show you this to be the case. And you can check the performance yourself, whenever you want, in real-time.

I’m sticking to a strategy that works through the noise and the fear.

If you want to follow the same strategy that helped me outperform, then follow my trades and stick with Doximity.