Trending Assets
Top investors this month
Trending Assets
Top investors this month
It is Time to Revisit $DOCS
One of my favorite "stocked ponds" to fish in for new investments are somewhat recent IPOs that have now been trading on the markets for over a year or two.
This little bit of time gives us at least four earnings reports, one 10-k, and the opportunity for standard IPO hype to wear off.
One company currently fitting this billing is Doximity $DOCS, which I rambled a bit about here:
After briefly trading above $100 shortly after its IPO, the company has settled in around the low $30s today and looks rather interesting, in my opinion.
Here is a brief synopsis of what makes Doximity worth a look:
- the platform is used by 80% of US physicians and 90% of graduates
- often called the "LinkedIn of healthcare," but CEO says it is more like the Bloomberg of HC
- its platform hosts a variety of productivity-boosting tools for HC workers (video calling w/ patients, scheduling, fax-on-the-go, e-signatures, newsfeed with continuing medical learning, etc.)
- these sticky tools generate daily engagement, which, paired with widespread physician adoption, make it a perfect advertising playground for pharma and hospital systems
- with physicians controlling roughly $3B of the $4B US HC industry, Doximity could become of paramount importance to advertisers as it offers a nearly direct line of contact
- already, the top 20 pharma and hospital systems are customers of Doximity's
- yet, the company only has a 5% market share of ad spend from the 415 largest US Rx brands
- despite being a recent IPO, DOCS already owns a FCF margin of 30% -- even after removing stock-based compensation from this figure
- sales "only" grew 18% in Q4, but DBNR was 124% among its largest 20 customers
- trades at 49x FCF (minus SBC again)
Ultimately, Doximity isn't cheap, but its 17x and 11x ad spend ROI for health systems and pharma customers should keep advertisers coming back.
Growing revenue by 22% in a year that saw most ad-dependant businesses struggle to some extent is just fine by me.
Looking a decade out, Doximity's $6B market cap doesn't seem to match the company's potential, thanks to its ability to get advertisers directly in front of the eyes of its highly engaged physicians.
Will Doximity beat the market through 2033?
60%Yes
30%No
10%Not sure
10 VotesPoll ended on: 6/5/2023
Already have an account?