C-suite executives tend to have a good understanding of their companies’ operating activities. If these insiders are buying company stock, it’s often a sign that the outlook for the stock is attractive.
In this report, we are going to highlight some interesting insider buying at Doximity Inc (DOCS:US). Doximity operates a digital platform for US medical professionals. Using its cloud-based platform, healthcare professionals can collaborate with colleagues, securely coordinate patient care, conduct virtual patient visits, stay up-to-date with the latest medical news and research, and manage their careers. The company is listed on the New York Stock Exchange and currently has a market capitalization of $7.06 billion.
Doximity Inc: Insider Buying
Our insider transaction data shows that between May 20 and May 27, two insiders at Doximity Inc bought stock. Those who made purchases were:
- Chief Executive Officer Jeffrey Tangney (2,950 shares @ $34.5 per share)
- Chief Revenue Officer Paul Jorgensen (15,000 shares @ $32.19 per share)
Combined, the two insiders spent around $581,175 on stock.
This trade is worth highlighting due to the fact that Doximity only came to the market (via an IPO) in June last year. Usually, we see insiders sell stock shortly after an IPO. However, in this case, Mr. Jorgensen has bought shares, and he has spent a considerable amount of money on stock too. This suggests that he is very confident the stock will move higher. Our Insider Model views this trading activity as bullish.
Doximity’s recent Q4 results showed that the company is growing at a healthy rate right now.
For the three months to the end of March, revenue amounted to $93.7 million, an increase of 40% year over year. Meanwhile, non-GAAP net income came in at $44.9 million versus $24.0 million a year earlier. Free cash flow was $44.9 million, versus $36.6 million in Q4 2021.
On the back of these results, the company’s board of directors authorized a new stock repurchase program to acquire up to $70 million of the Company's Class A common stock, commencing in the first quarter of fiscal 2023.
Looking ahead, Doximity said that it expects revenue of between $454 million and $458 million for the fiscal year ending March 31, 2023. That would represent year on year top-line growth of about 33%.
However, the stock fell after the results were published because the company's Q1 revenue guidance was below Wall Street’s expectations. Analysts had been expecting revenue of $96.8 million for Q1, yet the company said it was expecting revenue of between $88.6 million and $89.6 million.
The large purchase from the Chief Revenue Officer here suggests that he expects the stock to bounce back at some stage in the future. We see this insider buying as a bullish indicator.