Needham has revised down its 12-month price objective on Doximity Inc to $55.00 from $75.00 while keeping a Buy recommendation following the company's mixed fiscal third-quarter performance and cautious guidance for the upcoming quarter. The stock was trading at $33.32 at the time of the note, down roughly 11.1% over the prior week and hovering close to its 52-week low of $32.66. Market indicators show the shares are in oversold territory.
In Needham's assessment, Doximity's positive third-quarter fiscal 2026 earnings surprise was offset by a softer-than-expected outlook for the fourth quarter. The firm pointed to the timing impact of Most Favored Nation - MFN - agreements that were signed by 16 of the top 20 pharmaceutical companies around calendar year-end. Needham said those agreements pushed certain deals out of the third quarter, weighing on the near-term revenue cadence.
In addition to MFN-related timing, Needham flagged a weaker-than-expected upfront purchasing season at the start of calendar year 2026 as a contributor to the disappointing fourth-quarter guidance. Together, those dynamics explain the divergence between the quarter's reported results and the company's forward-looking forecast.
Despite the headwinds affecting Q4 guidance, Needham expressed confidence that budgets will begin to unlock as calendar year 2026 progresses. The firm believes Doximity is well-positioned to preserve robust market share and projects potential for approximately 10% growth in fiscal 2027 coupled with adjusted EBITDA margins above 50%.
On the balance sheet, Doximity appears financially healthy in Needham's view, with more cash than debt and a current ratio of 6.63, a figure that indicates strong short-term liquidity.
Operational results for the third quarter of fiscal 2026 showed diluted earnings per share of $0.46, narrowly ahead of the $0.45 forecast. Revenue was reported at $185.1 million versus expectations of $181.63 million. While the quarter beat both EPS and revenue estimates, brokers and analysts remain focused on the influence of policy-driven and timing effects on client budgets and purchasing behavior.
Other broker notes published around the same timeframe included Truist Securities trimming its price target on Doximity to $37 while maintaining a Buy rating, citing growth concerns. Separately, JPMorgan moved the stock from Underweight to Neutral and lowered its price target to $40. JPMorgan characterized the company's third-quarter results as exceeding guidance but impacted by policy-driven uncertainties that have affected client budgets.
Third-party valuation summaries cited in market commentary suggest a wide dispersion of analyst price targets on Doximity, ranging from $30 to $80. Some analyses conclude the shares may be undervalued at current market levels, though views differ across the analyst community.
Investors reacting to the mix of a quarter that beat consensus while signaling near-term softness face a company with solid liquidity metrics and a path to margin expansion, but also with near-term revenue timing risk tied to contractual and purchasing-season factors. The coming quarters will test whether budget timing normalizes and supports the revenue trajectory envisioned for fiscal 2027.