**(Put my thoughts in AI to write with clarity)**
**1) What is Doximity:** Known as "Linkedin for Doctors", leading digital professional network for U.S. physicians, with 85%+ of U.S. doctors as verified members. Offers workflow tools, telehealth, on-call scheduling, and recently AI-powered clinical search and scribe products.
**2) Revenue concentration in ads + very expensive:** Roughly 85-90% of revenue comes from pharmaceutical advertising sold to drug manufacturers targeting U.S. physicians. Soft pharma ad market hits the top line directly with no diversified cushion. Doximity commands CPMs of $80-150+ for physician-targeted ads vs. \~$7-15 for Meta and \~$3-8 for Google — a 30-50x premium pharma will increasingly question as AI-driven targeting on mass platforms improves.
**3) Earnings destruction** Stock fell \~24% on May 14 after management guided FY27 revenue growth to just 3-5%, down from 13% in FY26. Now down \~60% YTD and \~77% from the 52-week high.
**4) Still expensive despite the crash** Even post-crash, DOCS trades at 5.3x P/S and \~12.9x fwd P/E on just 5% growth — the highest P/S-to-growth ratio in the peer group, with Pinterest at 3.36x P/S on 13-16% growth and SNAP at 1.50x P/S on 10-12% growth offering cleaner setups.
**5) Margin compression from AI investments without monetization** EBITDA margins guided down from 55% to 49% as AI compute costs ramp, while management admits "minimal AI revenue this fiscal year." Engagement is up (+30% workflow users), but this will not translate in monetization. They pretty much have their entire doctor base on platform already
**6) AI is bifurcating the ad market** Meta and Google are pulling away through AI-driven ad optimization (Advantage+, Performance Max) that mid-tier platforms can't match. Pinterest, Snap, and a sub-scale Doximity are structurally disadvantaged as pharma budgets consolidate.
**7) No international path** \~100% U.S. business with no meaningful international revenue; verified-physician moat doesn't transfer across geographies. Sub-$700M revenue base is too small to fund the multi-year compliance build-out per market.
**8) Multiple compression has further to run** At a peer-comparable 3.5x P/S on FY27 $670M revenue, market cap would be \~$2.35B vs. current \~$3.42B — implying \~30% further downside to \~$12-13. IPO-era premium multiples aren't returning without growth reacceleration.
My position: $5000 in puts over 3, 6 month horizon
https://preview.redd.it/0gri9icknc1h1.png?width=947&format=png&auto=webp&s=e8187b9b5af340fbac1b5cb26a250f58dd68abad