Key Price Level to Watch for Doximity Shares

Doximity shares surged on Friday morning after the digital medical networking company reported quarterly earnings that surpassed Wall Street estimates, provided a strong current-quarter outlook, and announced a stock buyback program. The positive news propelled the stock higher, but investors should keep a close eye on a key price level that could impact its future trajectory.

Quarterly Earnings Beat Expectations

For the fiscal fourth quarter ending March 31, Doximity reported adjusted earnings of 25 cents per share, exceeding analysts’ forecasts of 20 cents per share. The company’s revenue for the period reached $118.1 million, up 6% from the previous year and surpassing expectations of $116.4 million. Subscription revenue also saw a significant increase, rising to $112.7 million, a 9% jump from the same period last year.

Looking ahead, Doximity provided a current-quarter net sales guidance of $119.5 million to $120.5 million, with the lower end of the range beating analysts’ estimates. However, the company’s full-year revenue projection of $506 million to $518 million fell slightly below the Street consensus of $520.8 million.

Focus on AI and Automation

Doximity highlighted its efforts to incorporate artificial intelligence (AI) and automation into its workflow tools to attract more healthcare professionals. The company’s co-founder and CEO, Jeff Tangney, emphasized the importance of bringing AI and automation to clinical workflows, with over 580,000 unique providers using their tools in the last quarter.

In addition to its technological advancements, Doximity also announced a stock buyback program, authorizing the purchase of up to $500 million of its Class A common stock. Stock buybacks are generally viewed favorably by investors as they demonstrate management’s confidence in the company and reduce the number of available shares for trading.

Key Price Level Analysis

Since early March, Doximity shares have been trading within a falling wedge pattern, indicating potential upward price movement. Following the positive quarterly results, the stock is poised to break out above the wedge’s top trendline. Investors should pay attention to the $28 level, where the stock may encounter overhead resistance from a horizontal line connecting previous price action over the past 13 months.

A breakout above this technically significant level could lead to a retest of this year’s high around $31.85. As of noon ET on Friday, Doximity shares were up 17.6% at $27.92.

Conclusion

Investors in Doximity should closely monitor the key price level at $28, where the stock may face resistance based on historical price action. A breakout above this level could signal further upside potential for the stock. With strong quarterly earnings, a positive outlook, and a stock buyback program in place, Doximity appears well-positioned for future growth.

The comments, opinions, and analyses expressed in this article are for informational purposes only. Readers are advised to conduct their own research and consult with a financial advisor before making any investment decisions.

As of the date of writing, the author does not hold any positions in Doximity or related securities mentioned in this article.

Original article: Investopedia