Hi,
I’m new to the board but I appreciate the no-nonsense analysis of business metrics I see here for prospective investments. So I was hoping to elicit some feedback on what appears to me a promising business to invest in called Doximity (DOCS).
I work in healthcare and doximity is a HIPAA compliant tool that my colleagues and I primarily use to do telehealth–either by phone or by video. It is billed as a “social media company” for doctors and other healthcare workers (I guess it is that as well, though this is not how I or those I know use it.) As a product it is excellent, and is the most glitch-free and slick of the telehealth platforms we are authorized to use (we do not use zoom, so I can’t compare). The other options we are authorized to use often have problems–the patient’s computer isn’t set up right, the internet is too slow to support quality video, or the alternative software is glitching again. Doximity is much easier to use for patients generally and more reliable. It has this cool electronic fax feature so that you can fax things without having a real fax machine. It reportedly has an esignature utility that could be really useful. When I first discovered it I was telling everyone I knew at work about it because it makes our professional lives much easier.
So that’s my anecdotal impressions of the product itself. The numbers from a business standpoint are also excellent.
From fiscal 2022 first quarter results (aug 10):
–167 percent net revenue retention for the trailing 12 months
–Revenue increased 100% yoy from 36.4 to 72.7 million
–GAAP income of 26.3 million versos 1.5 million June 2020
–gaap margin of 36% and Non gaap margin of 42%
–adjusted EBITDA of 31.2 million vs 3.9 million in June 2020
–operating cash flow of 33.2 million vs 8.8 million in June 2020
–cash position of 726.5 million (after raising 548 million from IPO on June 28 2021).
–guiding for revenue of 296.5 million to 2099.5 million for fiscal year ending march 31, 2022.
Pros:
-has the market cornered already–is this a kind of de facto “moat?” people speak of–with 80 percent of all doctors using it.
-excellent product
-revenue retention is excellent
Concerns:
-80 percent of doctors already use it, so is there sufficient room to grow? (possible answer to this is that there are many other health care professionals–social workers, nurses, CNAs, etc., who don’t use it who could become users down the line).
-i’m unclear on how much money the company makes from subscriptions vs ads, and I wonder how fast the ad revenue can grow with subscriptions among doctors already nearly hitting its cap.
This is my first post and my first real attempt to find a high growth company that has continued room to run. Sorry if I am not highlighting the most relevant info here. I’m interested in feedback about this company as a possible investment. Thanks.