How to Buy Doximity (DOCS) Stock

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Contributor, Benzinga
August 17, 2021

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For most professionals, paperwork is an unfortunate fact of life. But for medical professionals across the nation (and throughout the world) paperwork can be an occupational hazard. In a recent poll from the American College of Emergency Physicians, researchers discovered that 87% of emergency room (ER) doctors experienced increased stress during the COVID-19 pandemic.

Critical administrative errors can accumulate due to this crisis within a crisis. Fortunately, Doximity’s cloud-based platform securely and accurately facilitates patient care management for the medical community, mitigating administrative loads. It’s one of many reasons why investors are eyeballing its initial public offering (IPO).

When is the Doximity IPO Date?

Over the years, Doximity blossomed into one of the leading professional networks for physicians. Therefore, its public market debut was only a matter of time, and that moment arrives shortly. With a date of June 24, 2021 on the IPO calendar, Doximity will enter the fray in a busy session as 12 companies or funds will make their introductions.

Specifically, Benzinga Insights reports that Doximity’s common stock will trade publicly at 10:34 a.m. on the New York Stock Exchange (NYSE). Its ticker symbol is DOCS.

Based on its filings with the Securities and Exchange Commission, Doximity intends to sell 23.3 million shares, with the expected price range running between $20 and $23 per unit. Breaking down this allocation, the physicians’ network services provider will offer approximately 19 million shares of Class A common stock. Existing investors will sell another roughly 4.3 million Class A shares.

At the top end of the pricing spectrum, Doximity will raise almost $536 million. However, at the midway price of $21.50, the company will command a valuation of $4.5 billion. The lead underwriters for this offering are Morgan Stanley (NYSE: MS), Goldman Sachs (NYSE: GS) and JPMorgan Chase (NYSE: JPM).

Doximity Financial History

Primarily serving healthcare organizations such as pharmaceutical manufacturers, health systems and medical recruiting firms, Doximity forged for itself a powerful brand reputation through providing superior marketing, human resources and telehealth solutions. As well, the underlying platform facilitates face-to-face private number communications for physician privacy, along with secure coordination of patient care and collaboration for difficult-to-address cases.

Since its launch in 2011, Doximity has become the go-to resource for physician network needs. According to its S-1 filing, the company has over 600 enterprise-level client subscriptions. Further, its sales growth demonstrates its incredible relevance, particularly from the stresses of the pandemic. In fiscal year 2019 (which ended March 31), Doximity posted revenue of $116.4 million, up nearly 36% from the prior year’s sales tally of $85.7 million.

However, fiscal 2021 — the period that witnessed the biggest impact from the novel coronavirus — proved so far to be the breakthrough moment for the network services provider. Here, Doximity rang up $206.9 million in revenue, up almost 78% from 2019’s strong sales performance. In addition, net income jumped to $50.2 million in fiscal 2021, an increase of 69% against the prior year.

More than likely, because Doximity posted multiple years of positive earnings will play a factor in the DOCS IPO. A company that offers a similar telehealth service, Teladoc Health (NYSE: TDOC), posted a loss of $485 million in its most recent fiscal year. And that’s despite TDOC returning astoundingly robust gains for stakeholders during the pandemic-disrupted year of 2020.

Doximity Potential

Though many healthcare-related platforms soared during the coronavirus-fueled lockdowns last year, market evidence indicates that this narrative may be due for a correction. For instance, the aforementioned shares of Teladoc Health are priced at roughly half their February 2021 peak level. That was when coronavirus infection fears spiked because of the Super Bowl. But with new infections falling sharply and with TDOC going volatile, does this bode ominously for DOCS stock post-IPO?

Anything can happen in the markets so it’s best to never say never. At the same time, Doximity offers a broad range of physician services that are relevant to the healthcare sector, irrespective of an acute crisis like the pandemic. For example, stress among medical doctors skyrocketed during the lockdowns. But as the Washington Post reported, high pressure and tension have been part and parcel of the medical care industry.

Indeed, the Post describes that paperwork and other busy-bee tasks erode motivation for medical professionals to pursue their original passion. Waiting for patient lab results or insurance company approvals end up draining what little energy doctors have for these matters. As the article describes, the medical community has a rude term for this dynamic pajama time, denoting the after-hours work that physicians must conduct.

It’s no surprise, then, that Doximity garnered the institutional support that it has. Through a streamlined platform, medical doctors can focus on their core acumen — taking care of patients. More importantly, the patients themselves benefit due to higher accuracy in their paperwork. Thus, DOCS stock represents a potential win-win for the underlying sector.

How to Buy Doximity (DOCS) Stock

While the push for democratization in finance has begun to bear fruit, the traditional IPO process remains largely unchanged from its inception. With a limited number of shares available to sell, underwriters allow only their choicest clients — basically institutional investors — to purchase IPO stocks at their initial offering price.

True, this puts retail investors at a disadvantage. Nevertheless, to become a choice investor for an investment banking firm requires years of dedication and loyalty. Such a proposition is usually prohibitively expensive for regular buyers.

But that doesn’t mean buying IPOs at the open is a complete bust. As a retail investor, you choose which offerings to participate in without any undue pressure or obligation. Furthermore, the process is easy. If you know how to buy stocks, you can jump right in. Below is a quick refresher.

Step 1: Pick a brokerage.

Back in the analog era, brokerage offerings varied significantly in price and level of service. Fortunately, the advent of mobile trading apps brought the financial markets closer to retail investors in a convenient and accessible manner. To compete, the brokerage industry standardized key incentives, such as commission-free trading.

Thanks to this capitalist ethos, you are free to choose a platform that best suits your needs and lifestyle. Below is a list of best brokers to consider.

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Step 2: Decide how many shares you want.

Seemingly a mundane task, deciding your share count is vital as this figure represents your risk-reward profile. The higher the share count, the more profitability you will accrue as the target stock rises in value. Conversely, owning more equity units exposes you to greater risk should the valuation decline.

Typically, it’s ideal to save your high-share count trades for only the investments in which you feel quite strongly.

Step 3: Choose your order type.

Before placing your trade, ensure you understand the below market concepts:

  • Bid: The bid is the highest price a buyer will offer. It is always lower than the ask.
  • Ask: The ask is the lowest price that a seller will take. It is always higher than the bid.
  • Spread: Signaling the difference between the bid and ask, the spread also represents market liquidity and risk. Narrower spreads signal higher liquidity and lower risk due to buyer availability. Conversely, wider spreads indicate lower liquidity and higher risk.
  • Limit order: Use a limit order to trade stock at a specific price. Note that there’s no guarantee that the market will fulfill your limit order.
  • Market order: Place a market order to buy shares at the prevailing rate. The terms are least favorable to you, with buy orders executing on the ask and sells on the bid.
  • Stop-loss order: Stop-loss orders exit your position at a predetermined price or the next available price, whichever comes first. Beware gap-down sessions, which may cause your stop-loss order to fill below your predetermined price.
  • Stop-limit order: For transparency, use a stop-limit order to only fulfill at a specified price. Again, you have no guarantee that the market will fulfill your stop-limit order.

Step 4: Execute your trade. 

To execute a market order, follow these steps:

  1. Select action type (buy or sell).
  2. Enter the shares you want to acquire (or sell).
  3. Hit the Buy (or Sell) button.

Limit orders follow the same steps, except that you must enter your desired execution price.

Delivering Respite for Medical Doctors

Although everyone encounters stress on the job, this pressure in the healthcare industry poses exponentially higher risks. First, administrative duties already overwhelm physicians, who have much more important things to do. Second, onerous paperwork can unwittingly cause disastrous consequences for patients.

Therefore, the Doximity IPO couldn’t have arrived soon enough. By streamlining all the busy work associated with medical practices, physicians can effectively answer their higher calling. Just as crucially, patients benefit from a greater degree and accuracy of care.