Doximity, which ranks sixth on the IBD 50, broke out Friday and rocketed above a profit-taking zone after crushing Wall Street's December-quarter expectations and raising its outlook for the year.
Doximity stock skyrocketed 36% to 79.23. Shares broke out of a consolidation, topping a buy point at 61.75, according to MarketSurge. Shares are now 26% above their entry. Savvy investors are encouraged to take some profits when a stock rises 20% to 25% above its buy point.
The company, which makes software for medical professionals, wrapped its fiscal third quarter with adjusted earnings of 45 cents per share and $168.6 million in sales. Earnings surged more than 55% and easily beat expectations for 34 cents. Sales jumped 25%. Doximity beat analysts' call for $152.8 million and its own guidance for $152 million to $153 million in sales.
William Blair analyst Ryan Daniels described the quarter as "pristine."
"Put simply, it was a stellar quarter for the company across all key operational and financial metrics," he said in a report to clients.
Doximity Boosts Its Guidance
Doximity also hiked its guidance for the year and now expects adjusted earnings before interest, taxes, depreciation and amortization of $306.6 million to $307.6 million, vs. analysts' call for $279.6 million. The company now expects $564.6 million to $565.6 million in sales, well ahead of forecasts for $540 million, according to FactSet.
The company expects market growth to remain stable in the range of 5% to 7%, Daniels said.
"We believe the company is well positioned to exceed market growth and continue to gain share given its strong competitive position," he said. "In turn, we maintain comfort in assuming revenue can grow in the high-single- to low-double-digit range in fiscal 2026, with estimates likely to move higher given the fiscal 2025 sales outperformance."
In addition to ranking on the IBD 50 list of elite growth stocks, Doximity shares also hold perfect IBD Digital Composite and EPS ratings of 99. This means shares rank in the top 1% of all stocks when it comes to fundamental and technical measures, and profitability.
Doximity stock has a strong Relative Strength Rating of 97, a reflection of its 12-month performance on a 1-99 scale.
