Doximity downgraded at J.P. Morgan on valuation and advertising concerns

Hwangdaesung

Shares of Doximity (NYSE:DOCS [https://seekingalpha.com/symbol/DOCS]) traded lower on Friday after J.P. Morgan downgraded the California-based digital platform for medical professionals to Underweight from Neutral, citing concerns over its valuation and headwinds in the pharma advertising space.

Analyst Alexei Gogolev argued that Doximity (NYSE:DOCS [https://seekingalpha.com/symbol/DOCS]) warrants a premium multiple relative to J.P. Morgan’s coverage within the Vertical SaaS universe, given its strong financial profile. However, reaffirming his $62 per share target, the analyst added that its 2026E EV/EBITDA multiple of 36x indicates a sizable premium compared to a median multiple of 23x in the peer group.

Additionally, Gogolev wrote that as a proxy for its revenue growth, Doximity (NYSE:DOCS [https://seekingalpha.com/symbol/DOCS]) has used growth in pharma’s digital marketing targeted at healthcare professionals. The analyst pointed out that DOCS' FY26 outlook suggested a target growth twice the size of Pharma HCP digital marketing growth of 5%-6%.

“The shift to digital advertising has benefited DOCS, but growth remains tied to clinical trial outcomes and regulatory changes,” he wrote, adding that there is a lack of clarity over the company’s growth outlook amid uncertainty over pharma digital advertising trends.

Gogolev noted that other healthcare-related headwinds, such as labor shortages and staff turnover, have become additional challenges to the company’s demand, further worsened by an aging population.

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* Doximity, Inc. (DOCS) Q1 2026 Earnings Call Transcript [https://seekingalpha.com/article/4810760-doximity-inc-docs-q1-2026-earnings-call-transcript]
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