By Elsa Ohlen
Telehealth company Doximity's quarterly earnings beat wasn't enough to offset investors' disappointment around its guidance for the coming fiscal year.
The stock plummeted 21% to $45.99 in premarket trading Friday after the company cited macro uncertainty as the main reason behind the soft outlook, given Thursday after market close.
"We have not seen any signs of a market slowdown yet, but given the material policy uncertainty, we are assuming that there will be," CEO Jeffrey Tangney said in a call with investors Thursday.
Doximity operates an online platform that offers its members curated medical news, telehealth tools, and case collaboration. Its mobile app also allows health professionals to prescribe medication and communicate with patients via secure video calls and texting.
A worsening economic climate could negatively impact pharmaceutical advertisement spending, which could hit Doximity's profits.
Management did however note that it expects the pharma industry digital market to grow between 5% and 7% this year, roughly in line with growth in the past year, according to KeyBanc analysts.
For the fiscal fourth quarter, adjusted earnings were 38 cents a share on revenue of $138.3 million, comfortably above expectations for earnings of 27 cents a share on revenue of $133.7 million, according to analysts surveyed by FactSet.
Investors seemed to focus more on the company's guidance, though.
For the current quarter, the company sees revenue between $139 million and $140 million, and adjusted earnings before interest, tax, depreciation and amortization (Ebitda) between $71 million and $72 million, falling short of expectations.
Given the "cloud of policy uncertainty" surrounding the policy environment for pharma, Evercore analysts led by Elizabeth Anderson lowered their price target on shares to $50 from $60.
The pharmaceutical sector is currently facing threats from multiple directions: The Trump administration has vowed a "major" tariff on drugmakers and said it wants to substantially bring down the price of medicines in the U.S. -- both of which could be major blows to drugmakers' bottom lines.
"Overall, we still see DOCS as a structural share winner in the space, but like much of our pharma services coverage, at the short-term mercy of potential policy headwinds, which keeps us on the sidelines for the time being," Anderson said, reiterating her In Line rating on shares.
Write to Elsa Ohlen at elsa.ohlen@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
May 16, 2025 08:18 ET (12:18 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.