Sat, June 15, 2024

Doximity Class Action: Key Allegations Ahead of Deadline

Stocks

Quick Look:

  • Doximity is accused of misleading investors on business growth and profitability from February 2022 to April 2024.
  • Investors must file by June 17, 2024, in the class action lawsuit against Doximity.
  • Stock prices fell significantly following financial results announcements and a critical report.

Investors in Doximity, Inc. (NYSE: DOCS) should note that the filing deadline for a class action lawsuit against the company is rapidly approaching. Kessler Topaz Meltzer & Check, LLP has initiated legal proceedings in the United States District Court for the Northern District of California. The case, Kissler v. Doximity, Inc., et al., bears the case number 3:24-cv-02281-JST, with a June 17, 2024 deadline.

Doximity Allegedly Misled Investors: Key Period 2022-2024

The lawsuit spans a class period from February 9, 2022, to April 1, 2024, and centres around allegations that Doximity and key executives misled investors about the company’s business growth and profitability. The defendants include Doximity, Inc., Chief Financial Officer Anna Bryson, and Chief Executive Officer Jeff Tangney. The accusations claim the company downplayed the significance of customer upsell rates and provided disappointing financial guidance, culminating in workforce reductions.

Stock Drops 23% in 2023: Key Financial Events

Several critical events and dates underpin the allegations. During a quarterly earnings call on February 8, 2022, CFO Anna Bryson emphasised the company’s sustainable growth and high margins. Subsequently, on August 8, 2023, the announcement of Q1 FY 2024 financial results saw the stock price fall by $7.49 per share, a 23% decline from $32.79 to $25.30. Finally, on April 1, 2024, the publication of a report by Jehoshaphat Research led to a further stock price drop of $1.11 per share, or 4%, from $26.91 to $25.80.

Doximity Stock Ratings: Mixed Reviews, $28.73 Target

Doximity’s stock has seen varied analyst ratings and a mixed performance in the market. Besides, Needham & Company, LLC has rated it as Hold. Bank of America has given it a Neutral rating with a price objective of $32.00, according to a report dated January 23, 2024. JPMorgan Chase & Co upgraded its rating from Underweight to Neutral. Therefore setting a price objective of $25.00 in their April 25, 2024 report.

Morgan Stanley has maintained an Underweight rating with a price objective of $25.00, as reported on April 23, 2024. Evercore ISI has rated the stock in line with a price objective of $30.00, according to their April 2, 2024 report. Wells Fargo & Company has assigned an Equal Weight rating with a price objective of $27.00 in their February 9, 2024 report. The consensus rating stands at Hold with a price target of $28.73.

Doximity’s recent stock performance shows it is trading up 18.1%, with a current share price of $28.03. Over the past year, the stock has seen a low of $19.71 and a high of $36.29. The company has a market capitalisation of $5.23 billion, a PE ratio of 38.93, a PEG ratio of 2.99, and a beta of 1.18. The 50-day moving average is $25.65, and the 200-day moving average is $26.47.

Insider Sales Total $171K in 90 Days

Recent insider trading activity reveals that on May 17, 2024, Director Kira Scherer Wampler sold 2,500 shares at an average price of $27.22, amounting to a total transaction value of $68,050. Post-transaction, her ownership stands at 10,258 shares. On May 16, 2024, Craig Overpeck, another insider, sold 1,500 shares at an average price of $23.85, with a total transaction value of $35,775, leaving him with 108,609 shares post-transaction. Over the past 90 days, insiders have sold 6,500 shares valued at $171,250. Insider ownership is currently at 39.40%.

Institutional Stake in Doximity: 87.19% Ownership

Institutional investors have also made notable changes in their stakes. First Horizon Advisors Inc. increased its stake by 111.3% in Q4, holding 995 shares valued at $28,000. LRI Investments LLC established a new stake in Q1 valued at $34,000, while GAMMA Investing LLC also took a new position in Q4 worth $40,000. Essex Investment Management Co. LLC entered with a new stake in Q1 valued at $73,000. Creative Financial Designs Inc. ADV increased its stake by 16.7% in Q4, now holding 3,301 shares valued at $93,000. The overall institutional ownership percentage stands at 87.19%.

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