Actions of Proximity (NYSE: DOCS) are on the move after an encouraging first quarter earnings report. Investors excited about the growing profit margins of the niche healthcare networking platform pushed the stock up 21.9% as of 1:06 p.m. EDT on Wednesday.
Doximity debuted on the stock exchange just a few months ago, so this was its first quarterly earnings report as a publicly traded company. Expectations were high, but the company exceeded them nonetheless.
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In the company’s first fiscal quarter ended June 30, 2021, total revenue more than doubled from the previous year to $ 72.7 million. The stock would likely have risen further, but management also told investors to expect revenue in the fiscal second quarter to be between $ 73 million and $ 74 million.
For the full year, Doximity expects adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, to land in a range between 106 and 109 million dollars. With $ 11.4 billion market capitalization right now, you are probably thinking that the valuation of this stock is absolutely insane.
The unique position of this company in the gigantic American healthcare system gives Doximity a pretty good luck to grow in its valuation. Indeed, of the roughly $ 4 trillion in annual health care spending in the United States, about three-quarters are heavily influenced by physician decisions. Doximity already has more than 80% of the country’s doctors among its members.
In addition to being a great place to market products and services to physicians, Doximity also operates a rapidly growing telehealth solution. Although it is relatively new to the game compared to companies like Teladoc Health, Doximity made 63 million telehealth visits last year. With various contributors to a rapidly growing high margin income stream, this could be one of the best stocks you can buy at present.
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