Doximity (DOCS) Drops 6.53% in 3-Day Plunge; Weak Q3 Guidance Overshadows Strong Q2 Earnings

The share price fell to its lowest level since August 2025 today, with an intraday decline of 2.69%. Doximity (DOCS) has now dropped 6.53% over three consecutive trading sessions, marking its steepest three-day decline since early 2023. The stock’s slump follows mixed signals from the company’s Q2 2025 earnings report, which highlighted strong financial results but included weaker-than-expected Q3 guidance.

The company reported Q2 revenue of $168.5 million, a 23% year-over-year increase and above the $157.1 million consensus estimate. Non-GAAP earnings per share rose to $0.45, beating analyst forecasts. However, the stock sold off sharply after the company projected Q3 revenue of $180–181 million, slightly below the $180.7 million midpoint of analyst expectations. The guidance implied a 5.7% sequential revenue decline and raised concerns about near-term growth sustainability, despite CEO Jeff Tangney citing macroeconomic headwinds and physician burnout as contributing factors.

Analysts have highlighted valuation pressures, with Doximity’s price-to-sales ratio of 17.8x outpacing healthcare SaaS peers. While the company updated its full-year 2026 revenue guidance to $640–646 million, reflecting confidence in AI-driven tools like DoxGPT and AI Scribe, market skepticism persists over the scalability of these initiatives. Operational metrics, including 121 high-revenue clients and 23% subscription revenue growth, underscore its competitive position, but challenges such as regulatory scrutiny and intensifying competition remain. Investors will closely watch Q3 execution and AI adoption rates to determine if the stock can regain momentum.