(Put my thoughts in AI to write with clarity)
1) What is Doximity: Known as "Linkedin for Doctors", leading digital professional network for U.S. physicians, with 85%+ of U.S. doctors as verified members. Offers workflow tools, telehealth, on-call scheduling, and recently AI-powered clinical search and scribe products.
2) Revenue concentration in ads + very expensive: Roughly 85-90% of revenue comes from pharmaceutical advertising sold to drug manufacturers targeting U.S. physicians. Soft pharma ad market hits the top line directly with no diversified cushion. Doximity commands CPMs of $80-150+ for physician-targeted ads vs. \~$7-15 for Meta and \~$3-8 for Google — a 30-50x premium pharma will increasingly question as AI-driven targeting on mass platforms improves.
3) Earnings destruction Stock fell \~24% on May 14 after management guided FY27 revenue growth to just 3-5%, down from 13% in FY26. Now down \~60% YTD and \~77% from the 52-week high.
4) Still expensive despite the crash Even post-crash, DOCS trades at 5.3x P/S and \~12.9x fwd P/E on just 5% growth — the highest P/S-to-growth ratio in the peer group, with Pinterest at 3.36x P/S on 13-16% growth and SNAP at 1.50x P/S on 10-12% growth offering cleaner setups.
5) Margin compression from AI investments without monetization EBITDA margins guided down from 55% to 49% as AI compute costs ramp, while management admits "minimal AI revenue this fiscal year." Engagement is up (+30% workflow users), but this will not translate in monetization. They pretty much have their entire doctor base on platform already
6) AI is bifurcating the ad market Meta and Google are pulling away through AI-driven ad optimization (Advantage+, Performance Max) that mid-tier platforms can't match. Pinterest, Snap, and a sub-scale Doximity are structurally disadvantaged as pharma budgets consolidate.
7) No international path \~100% U.S. business with no meaningful international revenue; verified-physician moat doesn't transfer across geographies. Sub-$700M revenue base is too small to fund the multi-year compliance build-out per market.
8) Multiple compression has further to run At a peer-comparable 3.5x P/S on FY27 $670M revenue, market cap would be \~$2.35B vs. current \~$3.42B — implying \~20% further downside to \~$15. IPO-era premium multiples aren't returning without growth reacceleration.
My position: $5000 in puts over 3, 6 month horizon
https://preview.redd.it/0gri9icknc1h1.png?width=947&format=png&auto=webp&s=e8187b9b5af340fbac1b5cb26a250f58dd68abad