Why Did DOCS Stock Plunge 35% In Pre-Market Today?

• Wells Fargo cut Doximity’s price target to $45 from $55 while maintaining an ‘Overweight’ rating.
• Piper Sandler expressed confidence in Doximity’s platform despite a bleak near-term outlook.
• The company expects Q4 revenue in the range of $143 million to $144 million, compared to $185.1 million it reported in the third quarter.

Shares of Doximity Inc. (DOCS) slumped 35% in premarket trading on Friday, following a series of brokerage actions amid regulatory pressures and lower-than-expected fourth-quarter revenue guidance.

If the pre-market levels hold after the opening bell, DOCS stock will fall to its lowest levels since November 2023.

Competition, Regulatory Pressure Are Key Risks

Wells Fargo cut Doximity’s price target to $45 from $55 while maintaining an ‘Overweight’ rating, according to The Fly. The firm said limited visibility was already a concern ahead of the third quarter, but additional caution from pharmaceutical clients led to fewer upfront commitments and slower conversions than expected. While the stock’s decline to around $20 appears excessive, the brokerage noted that investor sentiment could take time to rebound

Piper Sandler slashed the company’s price target to $40 from $70, while maintaining an ‘Overweight’ rating. Analyst Jessica Tassan noted that Doximity is off to a slow start in 2026, with weak Q2 and Q3 bookings, as market growth slowed to about 5% and sales cycles lengthened amid pharma’s macro-driven caution. Despite the bleak near-term outlook, the firm expressed confidence in Doximity’s platform's strength.

Needham analyst Scott Berg lowered Doximity’s price target to $55 from $75 while maintaining a ‘Buy’ rating, citing competition and regulatory pressures as key risks even if the sell-off appears overdone. Although the Q4 guidance is disappointing, Needham expects budgets to improve through 2026.

Client Uncertainty Around Policy Changes

In a call with analysts on Thursday, Doximity stated that client uncertainty around recent policy changes and the Most Favored Nation agreement affected its annual budgets.

“First, we saw multiple customers deploy a lower percentage of their annual budgets upfront than usual as 2026 planning wasn't fully complete and some funds remained unreleased,” said Timothy Cabral, a member of the board.

“Second, this uncertainty resulted in many deals we normally have signed by December 31 being delayed and pushed into our fiscal Q4. This is evident in our January pharma bookings growth rate, which is the best we've seen since going public,” Cabral added.

Doximity’s Q3 revenue grew 10% to $185.1 million, but its diluted earnings per share declined to $0.31 from $0.37. The company expects Q4 revenue in the range of $143 million to $144 million and FY 2026 revenue between $642.5 million and $643.5 million. The company also announced a share repurchase program of up to $500 million of its Class A common stock.

How Did Stocktwits Users React?

Despite the pre-market crash, retail sentiment flipped to “extremely bullish” from “bearish” over the past 24 hours, amid “extremely high” message volumes.

Users felt that the selloff was an “overreaction”.

Over the past year, the stock has declined by around 43%.

Read also: AMZN Stock Falls To 8-Month Lows In Pre-Market After Declining Below 200-DMA For First Time Since October

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