Overview
Canaccord Genuity upgraded Doximity Inc (NYSE:DOCS) from Hold to Buy on Monday and simultaneously reduced its 12-month price target to $34, down from $48. The firm noted that the new target sits close to InvestingPro's Fair Value estimate, and argued that recent market moves have pushed the stock into territory that may overstate immediate risks to the business.
Recent price action and technicals
The company has experienced a pronounced decline in its share price in the wake of its fiscal third-quarter report. InvestingPro data cited by analysts indicates the stock fell 25.64% in the most recent week, and is down 58.35% over the last six months. Canaccord highlighted that the shares approached all-time lows for the public company after the earnings release, likening the reaction to an earlier episode of temporary weakness. The stock's relative strength index (RSI) shows it in oversold territory, according to the same InvestingPro dataset.
Drivers behind the downgrade and the upgrade thesis
Canaccord acknowledged that some of the market's concerns have been validated: Doximity's guidance for fiscal fourth quarter 2026 reflected tangible pressure tied to pharmaceutical marketing budgets. Still, the research house characterized the market's selloff as an overreaction to two primary near-term worries - reduced pharma marketing spend and the specter of AI-driven disruption - and expressed the view that those headwinds are likely to be transitory.
As a result, Canaccord expects Doximity shares to be "meaningfully higher a year from now" as pharmaceutical budgets stabilize after a period of policy and pricing uncertainty, even while accepting weaker near-term guidance.
Earnings and peer analyst reactions
Doximity's fiscal third-quarter results beat its own revenue and EBITDA guidance, outperforming consensus by $4.6 million (2%) on revenue and $7.9 million (7%) on EBITDA. Despite that outperformance, several sell-side firms adjusted their views and price targets following the report.
- BMO Capital lowered its price target to $25 from $45 and kept a Market Perform rating, citing near-term headwinds.
- Piper Sandler cut its target to $40 from $70, pointing to slow bookings in recent quarters.
- Needham trimmed its target to $55 from $75, noting mixed earnings results overshadowed by weaker fourth-quarter guidance.
- Truist Securities set a new target of $37 and described growth concerns despite calling the recent results strong.
- JPMorgan raised its rating to Neutral from Underweight but lowered its target to $40 from $62, citing policy-driven uncertainty and a back-end weighted revenue cadence.
Bottom line
Canaccord's upgrade to Buy reflects a conviction that the market has placed too large a premium on short-term uncertainties, while the lowered price target signals tempered expectations for near-term upside. Other firms' reduced targets and more cautious stances underline that analyst sentiment remains mixed even after Doximity's quarter exceeded guidance on key metrics.
Note: This piece reports analyst actions, company guidance and recent earnings beats as stated by research firms and InvestingPro data. It does not introduce additional material facts beyond those cited by those parties.