Doximity Q4 earnings likely to reflect strong product momentum

Doximity is scheduled to release fourth-quarter fiscal 2025 results on May 15, after market close. In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate by 36.36%. DOCS delivered a trailing four-quarter average earnings surprise of 26.00%.

DOCS Q4 estimates

Currently, the consensus estimate for revenues is pegged at $133.8 million. The consensus mark for earnings is pinned at 27 cents per share.

Factors to note

Doximity’s fourth-quarter fiscal 2025 performance is expected to have benefited significantly from the strong momentum of its product portfolio, particularly the growth of new modules and integrated offerings. In the third quarter, the company’s point-of-care and formulary modules, introduced outside the core news feed, recorded over 100% year-over-year growth and accounted for 20% of pharmaceutical sales. These products represent entirely new inventory and are gaining rapid adoption among clients. This might have set the stage for continued contribution in the fourth quarter, especially as many of these deals were launched in early January.

A major growth catalyst has been Doximity’s multi-module integrated programs, which allow clients to launch campaigns using any module with pre-approved content, speeding up time-to-market. This flexibility led to a higher percentage of January launches than in prior years, which, in turn, should have resulted in a greater share of annual contract revenues being recognized in the fourth quarter. As a result, Doximity expects stronger fourth-quarter revenue conversion compared to the previous quarters.

Doximity, Inc. price and EPS surprise

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

The company’s client portal, now in use by more than half of its pharmaceutical brand partners, is also contributing to commercial traction. The portal offers actionable insights through real-time ROI analytics, helping clients fine-tune campaigns and increasing upsell potential.

Additionally, AI-powered tools, though not yet monetized, saw a 60% sequential increase in usage during the third quarter, with 1.8 million prompts submitted by physicians. This growing engagement supports the long-term monetization of Doximity’s workflow products and enhances the overall platform stickiness. This trend should have resulted in higher adoption of DOCS’ services, driving the top line.

Meanwhile, DOCS, after reporting an exceptionally strong third quarter (driven by outsized upsells, accelerated program launches and a favorable product mix), expects a more modest 13% year-over-year revenue growth for the soon-to-be-reported quarter. This suggests that some of the early revenue pull-forward from January launches might have limited sequential growth in product contributions during the quarter.

Additionally, the third quarter marked the end of Doximity’s major annual buying cycle, where clients commit most of their yearly marketing spend. As a result, the fourth quarter is likely to have been a lighter quarter for new bookings, potentially constraining near-term expansion in new products or module sales.

Moreover, the health system segment, while stabilizing, continues to face macroeconomic uncertainty. Although it is not the primary revenue driver, slower adoption or budget constraints in this cohort could have limited growth in workflow-based tools like telehealth or scheduling that complement commercial products.

What the Zacks model unveils

Our proven model does not conclusively predict an earnings beat for Doximity this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here, as you will see below.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00% for Doximity.

Stocks worth a look

Here are a few stocks worth considering from the broader medical sector, as these have the right combination of elements to come up with an earnings beat this reporting cycle.

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STOK’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 24.66%. The Zacks Consensus Estimate for first-quarter EPS implies an improvement of 35.1% from the year-ago reported figure.

Altimmune has an Earnings ESP of +6.60% and a Zacks Rank of 2 at present. The company is scheduled to release first-quarter results on May 13.

ALT’s earnings surpassed estimates in three of the trailing four quarters and missed the same once, the average surprise being 54.91%. The Zacks Consensus Estimate for first-quarter EPS implies a decline of 29.4% from the year-ago reported figure.

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