• If you are wondering whether Doximity is attractively priced at its current level or if the market is overlooking something in plain sight, this article is for you.
• The stock is at US$41.26 after a 5.8% decline over the last 7 days, a 5.6% decline over 30 days and a 4.7% decline year to date, while the 3 year return sits at 27.8% and the 1 year return at a 23.2% decline.
• Recent coverage around Doximity has focused on its role as a digital platform for medical professionals and how that positioning fits into broader shifts in healthcare technology. This context is important because sentiment around healthcare platforms can influence how investors react to price moves and reassess what they are willing to pay for the stock.
• Doximity currently scores 4 out of 6 on our valuation checks. Next we will look at how different valuation approaches line up on this stock, before finishing with a way to frame valuation that many investors find even more useful than the individual models alone.

Approach 1: Doximity Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model takes estimates of the cash a company could generate in the future and discounts those cash flows back to today to reach an estimate of what the business might be worth now.

For Doximity, the model uses last twelve months Free Cash Flow of about $311.3 million and a 2 Stage Free Cash Flow to Equity approach. Analysts have provided forecasts out to 2030, with projected Free Cash Flow of $521.7 million in that year. Beyond the first few years, Simply Wall St extrapolates the ten year path of cash flows from these analyst inputs.

Using these cash flow projections in $, discounted back to today, the DCF model arrives at an estimated intrinsic value of about $52.06 per share. Compared with the current share price of $41.26, this implies the stock is 20.7% undervalued on this model.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Doximity is undervalued by 20.7%. Track this in your watchlist or portfolio, or discover 862 more undervalued stocks based on cash flows.

Approach 2: Doximity Price vs Earnings

For a profitable company like Doximity, the P/E ratio is a useful yardstick because it links what you pay directly to the earnings the business is already generating. It gives you a simple way to think about how many dollars you are paying for each dollar of current earnings.

What counts as a “normal” P/E depends on how the market sees a company’s growth potential and risk. Higher expected growth and lower perceived risk usually support a higher P/E, while slower growth or higher risk tend to pull it down.

Doximity currently trades on a P/E of 30.70x, which is close to the Healthcare Services industry average of 31.59x and below the peer group average of 65.61x. Simply Wall St also calculates a proprietary “Fair Ratio” of 21.56x for Doximity. This Fair Ratio estimates the P/E that might be appropriate given factors such as earnings growth, profit margin, industry, market cap and company specific risks.

Because the Fair Ratio is tailored to Doximity’s own profile, it can be more informative than a simple comparison with peers or the broad industry. With the current P/E of 30.70x above the Fair Ratio of 21.56x, the shares screen as more expensive on this metric.

Result: OVERVALUED

P/E ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1445 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Doximity Narrative

Earlier we mentioned that there is an even better way to understand valuation. On Simply Wall St's Community page you can use Narratives to link your view of Doximity's story to specific forecasts and a fair value, compare that fair value with the current price to decide whether the stock looks attractive or not, and see that view automatically update as news or earnings arrive. This means one investor might build a bullish Doximity Narrative around AI workflow tools, diversified digital marketing demand and a fair value near US$80. Another may focus on regulatory risk, pharma spend dependence and margin pressure and land closer to US$55. This gives you a clear, easy framework to see where you personally sit between those views.

Do you think there's more to the story for Doximity? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.