Goldman Sachs Revises Doximity Rating to Sell Amidst Valuation Concerns

Goldman Sachs Downgrades Doximity to Sell

Doximity Inc. (NYSE:DOCS) experienced a notable decline in its stock value following a rating adjustment by Goldman Sachs. On October 1, 2025, analyst David Roman downgraded the digital health platform provider from a "Neutral" to a "Sell" rating. This revision comes as part of a broader review of the MedTech and Healthcare IT sector by the investment bank.

The announcement led to an immediate market reaction, with DOCS shares closing at $70.64, marking a 3.43% decrease during the trading session. This performance contrasted with the broader market, as the S&P 500 advanced by 0.34%, the Dow Jones Industrial Average gained 0.09%, and the technology-centric Nasdaq Composite rose by 0.42%.

Nuanced Outlook on Valuation and Future Prospects

Despite the downgrade to "Sell," Goldman Sachs simultaneously raised its 12-month price target for Doximity from $57.00 to $64.00. This seemingly contradictory move underscores a complex sentiment regarding the company's prospects. Analyst David Roman clarified that the downgrade was primarily driven by concerns over the stock's current valuation and its risk/reward profile, rather than a cautious view on the company's long-term growth trajectory. Roman noted that Doximity's current valuation already reflects its key strengths, such as its leadership in the digital advertising space for medical professionals.

The analyst’s thesis suggests that while the company's attributes are well-captured in current consensus numbers and valuation, the next phase of significant growth, potentially from AI platform solutions, is expected to take time to generate a sustained financial impact.

Market Positioning and Analyst Consensus

Doximity operates a cloud-based digital platform specifically designed for U.S. medical professionals, offering tools for collaboration, patient care coordination, virtual visits, and access to medical news and research.

The broader analyst community presents a mixed but generally more optimistic outlook compared to Goldman Sachs' recent revision. Based on price targets from 18 analysts, the average one-year target for DOCS is $69.94, with estimates ranging from a high of $80.00 to a low of $55.00. This average implies a minor downside of 1.07% from the stock's price of $70.70 at the time of some analyses.

Among 20 brokerage firms, the consensus recommendation for Doximity Inc. holds an average of 2.3 on a scale where 1 signifies "Strong Buy" and 5 denotes "Sell," indicating an "Outperform" status. This contrasts sharply with Goldman Sachs' "Sell" rating.

Adding to the bearish sentiment observed on the day of the downgrade, the Open Interest Put/Call Ratio for DOCS stands at 1.12. A ratio above 1 generally suggests that options traders are anticipating a downward movement in the stock price.

Implications and Forward View

The downgrade by a major institution like Goldman Sachs could lead to increased scrutiny from investors and potentially prompt other analysts to re-evaluate their positions on Doximity. While the stock has seen a 9.18% gain over the past month, outperforming the Medical sector's 1.97% rise during the same period, the recent downgrade introduces a new layer of uncertainty.

Investors will likely monitor Doximity's progress in integrating new technologies, particularly in AI platform solutions, as these are identified as potential catalysts for future growth. The company's impressive gross profit margins of 90.2% highlight its operational efficiency, but the path to translating this into sustained top-line expansion in a competitive market will be a key focus. The divergence in analyst opinions, particularly the "Sell" rating alongside a raised price target from Goldman Sachs, signals that the market is grappling with how to appropriately value Doximity's current market position against its future growth potential.