NEW YORK, April 24, 2024 /PRNewswire/ — Attorney Advertising– Bronstein, Gewirtz & Grossman, LLC, a nationally recognized law firm, notifies investors that a class action lawsuit has been filed against Doximity, Inc. (“Doximity” or “the Company”) (NYSE: DOCS) and certain of its officers.
Class Definition:
This lawsuit seeks to recover damages against Defendants for alleged violations of the federal securities laws on behalf of all persons and entities that purchased or otherwise acquired Doximity securities between February 9, 2022 and April 1, 2024, inclusive (the “Class Period”). Such investors are encouraged to join this case by visiting the firm’s site: bgandg.com/DOCS.
Case Details:
According to the Complaint, Doximity operates a digital platform that provides connections between, medical information to, and patient scheduling tools for medical professionals. Doximity serves more than 2 million registered members including over 80% of U.S. physicians and over 50% of nurse practitioners and physician assistants.
The Complaint alleges that throughout the Class Period Defendants made materially false and/or misleading statements as well as failed to disclose material adverse facts about the Company’s business and operations. Specifically, Doximity repeatedly touted the Company’s business prospects and the sustainability of the Company’s revenue growth and profitability while downplaying (1) the impact of competition and tightening macroeconomic conditions on the Company and (2) Doximity’s reliance on “upselling” products and services (such as additional advertising) to existing customers to sustain the Company’s performance and future growth.
On February 9, 2022, according to the Complaint, Doximity released its quarterly financial results for the third quarter of fiscal year 2022, which ended December 31, 2021, after the market closed the night prior. During the accompanying quarterly investor earnings call afterhours on February 8, 2022, the Company’s Chief Financial Officer (CFO) emphasized that “marketers have been able to witness the value of running these digital programs” and that it was this “value that’s the main reason we’re seeing this sustained demand from our customers and not new [COVID] variants.” To this end, Doximity’s CFO further assured investors that the Company was “focused on . . . really building a business that can provide years of sustainable growth with high margins.”
According to the Complaint, throughout the Class Period, Doximity continued to tout the sustainability of the Company’s business prospects while also downplaying the importance of customer upsell rates on the Company’s financial performance. For example, during the Company’s second quarter fiscal year 2023 investor earnings call on November 10, 2022, the Company’s Chief Executive Officer (CEO) reassured investors that “pharma’s doing quite well” amid investor concerns that macroeconomic headwinds would substantially impact Doximity’ financial performance. The CEO similarly emphasized that the Company’s sales pipeline has “bigger dollar deals than we’ve seen before” and, to alleviate investor concerns, explained that, while Doximity’s upsell rates were “a little below historical norms,” customer upsells are “not a significant portion of our revenue.”
However, the truth about Doximity’s growth and profitability began to emerge on August 8, 2023, when, according to the Complaint, after the market closed, Doximity reported its financial results for the first quarter of fiscal year 2024, which ended June 30, 2023. While the Company exceeded its quarterly revenue and adjusted EBITDA guidance for the first quarter, the Company provided disappointing guidance for the second quarter of fiscal year 2024 and slashed its guidance for the full fiscal year 2024. Specifically, Doximity announced that it expected fiscal year 2024 revenue of between $452 million and $468 million (down from prior guidance of between $500 million and $506 million and representing year-over-year revenue growth of only between 7.9% and 11.7%), and adjusted EBITDA of between $193 million and $209 million (down from prior guidance of between $216 million and $222 million and representing year-over-year adjusted EBITDA growth of only between 4.9% and 13.6%).
In conjunction with the disappointing guidance, according to the Complaint, Doximity announced that it would reduce its workforce by approximately 10%. The Company further noted that the workforce reduction is expected to cost approximately $8 million to $10 million. In explaining this about-face, Doximity’s CFO admitted that the Company’s “major upsells have materially underperformed, and we expect this to continue in the near term.” The CEO further explained that Doximity failed to close sales due, in part, to “fewer face-to-face meetings with our clients.”
On this news, the price of Doximity common stock declined $7.49 per share, or nearly 23%, from a close of $32.79 per share on August 8, 2023, to close at $25.30 per share on August 9, 2023.
Therefore, according to the Complaint, as a result of Doximity’s wrongful acts and omissions, and the significant decline in the market value of the Company’s common stock pursuant to the revelation of the fraud, investors have suffered significant damages.
What’s Next?
A class action lawsuit has already been filed. If you wish to review a copy of the Complaint, you can visit the firm’s site: bgandg.com/DOCS or you may contact Peretz Bronstein, Esq. or his Law Clerk and Client Relations Manager, Yael Nathanson of Bronstein, Gewirtz & Grossman, LLC at 332-239-2660. If you suffered a loss in Doximity you have until June 17, 2024, to request that the Court appoint you as lead plaintiff. Your ability to share in any recovery doesn’t require that you serve as lead plaintiff.
There is No Cost to You
We represent investors in class actions on a contingency fee basis. That means we will ask the court to reimburse us for out-of-pocket expenses and attorneys’ fees, usually a percentage of the total recovery, only if we are successful.
Why Bronstein, Gewirtz & Grossman:
Bronstein, Gewirtz & Grossman, LLC is a nationally recognized firm that represents investors in securities fraud class actions and shareholder derivative suits. Our firm has recovered hundreds of millions of dollars for investors nationwide.
Attorney advertising. Prior results do not guarantee similar outcomes.
Contact:
Bronstein, Gewirtz & Grossman, LLC
Peretz Bronstein or Yael Nathanson
332-239-2660 | [email protected]
SOURCE Bronstein, Gewirtz & Grossman, LLC
