Doximity ( NYSE: DOCS ) stock extended losses, dropping to a 7-week low on Friday after the company slashed its FY guidance .
Bank of America downgraded DOCS to Underperform from Neutral, citing macro pressures.
The brokerage also cut its price target on DOCS to $29 (potential downside of 28% to last close) from $43, based on 25x CY23E EV/EBITDA, a premium to profitable health IT peers.
"We believe DOCS should trade at a premium to peers on a revenue and EBITDA multiple basis, given faster revenue growth and higher EBITDA margins," analyst Allen Lutz wrote in a note to clients.
Lutz said there is limited medium-term clarity around DOCS' growth normalization as some of its customers pulled back on mid-year upsells due to macro factors.
Multiple peers are becoming more aggressive on price, adding further near-term pressure to DOCS' revenue growth.
BofA cut its FY23 revenue estimates to $429.5M from $454.7M and FY24 estimates to $545.5M from $591.1M, citing macro pressures.
It also reduced FY23 EBITDA estimates to $181.0M from $195.7M and FY24 estimates to $222.7M from $248.9M, citing slower revenue growth and weaker gross margins.
Shares of DOCS declined ~33% YTD.
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Doximity stock hits 7-week low; Bank of America downgrades on macro pressures