The Sudden Sharp Declines in Doximity, Bentley Systems, Zeta Global, Guidewire Software, and SoundHound AI: What's Driving the Sell-Off?

text2img: A comparative bar chart showing 2025 revenue growth versus stock price performance for Doximity, Bentley Systems, Zeta Global, Guidewire Software, and SoundHound AI, with annotations highlighting key catalysts like guidance cuts, analyst downgrades, and cash flow concerns.

visual: Generate a bar chart comparing 2025 year-over-year revenue growth (x-axis) against stock price changes in 2025 (y-axis) for the five companies, using data from the provided sources. Include color-coded labels for "Guidance Cuts," "Analyst Downgrades," and "Profitability Concerns."

The recent sharp declines in stocks of Doximity (DOCS), Bentley Systems (BSY), Zeta Global (ZETA), Guidewire Software (GWRE), and SoundHound AI (SOUN) have sparked debate about whether these dips reflect overcorrections or early warnings of structural challenges. By dissecting each company's financial fundamentals against market sentiment and near-term catalysts, we can assess whether these sell-offs present compelling value opportunities or signal deeper risks.

Doximity: Strong Fundamentals vs. Growth Concerns

Doximity's 2025 full-year revenue of $570.4 million-a 20% increase-coupled with a 55% adjusted EBITDA margin and $266.7 million in free cash flow, underscores its operational strength, according to Doximity's full‑year 2025 earnings report. However, the stock plummeted 23% after the company guided for 9%–11% revenue growth in 2026, a stark slowdown from FY25's 20% pace, as shown in Doximity's Q4 2025 results and guidance. Analysts like Goldman Sachs downgraded the stock to "Sell," citing "high valuation and slowing growth," per a Goldman Sachs downgrade report. While Doximity's AI-driven tools and recent acquisitions (e.g., Pathway Medical) position it for long-term innovation, the market's reaction highlights skepticism about sustaining hypergrowth in a competitive healthcare tech landscape.

Bentley Systems: Earnings Beats Mask Long-Term Weakness

Bentley Systems reported Q1 2025 revenue of $370.5 million, a 9.7% year-over-year rise, with EPS of $0.35 exceeding estimates, according to Bentley Systems' Q1 2025 earnings release. Yet, its trailing 12‑month earnings fell 28.3% to $255.8 million, per WallStreetZen's TTM earnings data. This discrepancy suggests short-term operational wins may not offset broader challenges, such as margin compression in engineering software markets. The stock's muted response to Q1 beats reflects investor caution about whether Bentley can maintain profitability amid macroeconomic headwinds and shifting demand for infrastructure tech.

Zeta Global: Optimism vs. Volatility in AI-Driven Growth

Zeta Global's Q1 2025 revenue surged 36% to $264 million, with adjusted EBITDA up 53% to $47 million, according to Zeta's Q1 2025 earnings report. The company raised full‑year guidance to $1.237 billion–$1.247 billion, as reported in Zeta Global's guidance update. Despite these positives, shares fell 4.08% post-earnings, signaling market doubts about scalability. Zeta's reliance on high‑margin customer retention strategies and its ability to monetize AI innovations without diluting margins will be critical to justify its valuation.

Guidewire Software: Revenue Growth vs. Cash Burn

Guidewire Software's Q1 2025 revenue grew 27% to $262.9 million, with ARR reaching $874 million, according to Guidewire's Q1 2025 financials. However, the company reported a $67.4 million free cash outflow-driven by bonuses and rising operating expenses-and a 15% stock plunge followed the report, as described in a Guidewire stock crash analysis. While Guidewire's cloud adoption (nine new deals, including Zurich Insurance) is promising, its profitability challenges and 12% expense growth raise questions about long-term scalability in the insurtech sector.

SoundHound AI: Hype vs. Profitability Gaps

SoundHound AI's stock soared 500% in 2024–2025, fueled by a $131.4 million revenue surge and a strategic AI acquisition, as discussed in a Forbes analysis. Yet, the company posted a $351 million net loss in 2024 and trades at a 37.6 P/S ratio, 255% higher than 2023, per SoundHound AI financials. While its $200 million cash reserves and enterprise AI expansion offer flexibility, the market's focus on profitability means further gains depend on closing the gap between revenue growth and EBITDA.

Conclusion: Opportunities or Warnings?

The sell-offs in these stocks reflect a tug-of-war between strong fundamentals and market skepticism. For Doximity and Zeta Global, the declines may present entry points for long-term investors betting on AI-driven innovation. However, Bentley and Guidewire's struggles with margins and cash flow suggest caution, while SoundHound's valuation remains a double-edged sword. Near-term catalysts-such as Doximity's AI roadmap, Zeta's customer retention metrics, and SoundHound's August 2025 earnings report-will be critical in determining whether these dips are buying opportunities or early warnings of structural fragility.