Since March 2026, Doximity has been in a holding pattern, posting a small return of 2.8% while floating around $26.41. The stock also fell short of the S&P 500’s 12.1% gain during that period.
Is now the time to buy Doximity, or should you be careful about including it in your portfolio? See what our analysts have to say in our full research report, it’s free.
Why Is Doximity Not Exciting?
We’re sitting this one out for now. Here are three reasons we avoid DOCS, plus one stock we’d rather own.
1. Weak Billings Point to Soft Demand
Billings is a non-GAAP metric that is often called “cash revenue” because it shows how much money the company has collected from customers in a certain period. This is different from revenue, which must be recognized in pieces over the length of a contract.
Doximity’s billings came in at $159.3 million in Q2, and over the last four quarters, its year-on-year growth averaged 7.9%. This performance was underwhelming and suggests that increasing competition is causing challenges in acquiring/retaining customers. 
2. Projected Revenue Growth Is Slim
Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite.
Over the next 12 months, sell-side analysts expect Doximity’s revenue to rise by 4.6%, a deceleration versus its 21.9% annualized growth for the past five years. This projection is underwhelming and suggests its products and services will see some demand headwinds.
3. Shrinking Operating Margin
Many software businesses adjust their profits for stock-based compensation (SBC), but we prioritize GAAP operating margin because SBC is a real expense used to attract and retain engineering and sales talent. This is one of the best measures of profitability because it shows how much money a company takes home after developing, marketing, and selling its products.
Looking at the trend in its profitability, Doximity’s operating margin decreased by 10.5 percentage points over the last two years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. Its operating margin for the trailing 12 months was 29.6%.
Final Judgment
Doximity’s business quality ultimately falls short of our standards. With its shares lagging the market recently, the stock trades at 7.5× forward price-to-sales (or $26.41 per share). While this valuation is fair, the upside isn’t great compared to the potential downside. We’re fairly confident there are better stocks to buy right now. We’d suggest looking at our favorite semiconductor picks and shovels play.
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