DOCS- A Healthcare Play That's on the Move After Beat-and-Raise Quarter

Shares of Doximity Inc. (DOCS) recently jumped 10% after a beat-and-raise Q1 FY26 report and news of a better-than-expected start to the upsell season. The quarter had more of what we wanted and less of what we didn’t, which is a good thing and came as a surprise to the market, highlights Tyler Laundon, editor of Cabot Early Opportunities.

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On the call, management said customer marketing budgets are stabilizing, and while there is certainly some policy uncertainty out there, there is no slowdown in the business. Revenue grew 15.2% to $145.9 million (beat by $6.4 million), and adjusted earnings per share grew 28.6% to $0.36 (beat by $0.06).

Doximity Inc. (DOCS)A graph of a graph AI-generated content may be incorrect.

Doximity’s AI suite is gaining momentum. The recently launched Doximity Scribe tool seems to be a hit. Plus, the just-announced $26 million Pathway acquisition gives docs free (for now) AI-powered clinical reference tools. Along with Doximity GPT, it can be used for note-taking, letter drafting, and addressing clinical questions. Look for management to discuss how this will all translate to revenue in the future.

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FY26 revenue guidance goes up to $628 million - $636 million versus prior guidance of $619 million - $631 million, implying 11.6% growth at the high end.

Recommended Action: Buy DOCS.

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