The Price-to-Earnings (PE) ratio is a go-to metric when valuing profitable companies like Doximity. It provides a direct look at how much investors are paying for each dollar of the company’s earnings, making it especially relevant for businesses that are already generating consistent profits.

Growth expectations and perceived risks both play crucial roles in determining what qualifies as a “normal” or “fair” PE multiple. Companies with rapid earnings growth and fewer risks typically command higher PE ratios, while those with slowing growth or more uncertainties are valued at lower multiples.

At present, Doximity trades at a PE ratio of 37.5x. For context, the average PE across the Healthcare Services industry is 34.1x, while similar peers average 65.9x. On the surface, Doximity appears to be trading at a modest premium to its industry but at a significant discount to its peers.

To add deeper context, Simply Wall St calculates a “Fair PE Ratio” for Doximity, which incorporates not just earnings growth and industry group but also factors such as profit margins, market cap, and company-specific risks. This approach provides a more tailored and reliable benchmark compared to simply comparing to industry or peer averages, giving investors a clearer picture of what the stock should be worth based on its unique profile.

The Fair PE Ratio for Doximity is 24.9x, meaning the stock currently trades above this proprietary fair value benchmark. While this does suggest Doximity is valued at a premium, the difference is not dramatic. Given how close these figures are, the stock appears to be priced about right based on this metric.

Result: ABOUT RIGHT

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1422 companies where insiders are betting big on explosive growth.

Earlier we mentioned that there is an even better way to understand valuation. Let’s introduce you to Narratives. In simple terms, a Narrative is the story you believe about a company—what you think its future holds—translated into a set of financial forecasts and a fair value estimate. It connects your unique perspective about Doximity’s business model, industry opportunities, and risks directly to the numbers. This helps you see how different assumptions can impact what the company is actually worth.

Narratives are made easy with Simply Wall St, where millions of investors use the Community page to create, share, and compare their own takes on a company’s future. Each Narrative links a company’s journey from growth drivers like AI-powered workflow tools or digital marketing shifts, through revenue and margin forecasts, all the way to a target price. This allows you to see at a glance how your story aligns with the current market price.

What makes Narratives so powerful is their dynamic ability to update automatically when new information, like earnings or news, comes in. This keeps your valuation fresh and your decisions timely. For example, some Doximity investors are bullish, projecting a fair value as high as $80, focused on AI adoption and digital trends. Others are more cautious, estimating just $55 and emphasizing regulatory or user growth risks. Narratives put the power to decide when to buy, hold, or sell squarely in your hands.

Do you think there’s more to the story for Doximity? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include DOCS.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

The Price-to-Earnings (PE) ratio is a go-to metric when valuing profitable companies like Doximity. It provides a direct look at how much investors are paying for each dollar of the company’s earnings, making it especially relevant for businesses that are already generating consistent profits.

Growth expectations and perceived risks both play crucial roles in determining what qualifies as a “normal” or “fair” PE multiple. Companies with rapid earnings growth and fewer risks typically command higher PE ratios, while those with slowing growth or more uncertainties are valued at lower multiples.

At present, Doximity trades at a PE ratio of 37.5x. For context, the average PE across the Healthcare Services industry is 34.1x, while similar peers average 65.9x. On the surface, Doximity appears to be trading at a modest premium to its industry but at a significant discount to its peers.

To add deeper context, Simply Wall St calculates a “Fair PE Ratio” for Doximity, which incorporates not just earnings growth and industry group but also factors such as profit margins, market cap, and company-specific risks. This approach provides a more tailored and reliable benchmark compared to simply comparing to industry or peer averages, giving investors a clearer picture of what the stock should be worth based on its unique profile.

The Fair PE Ratio for Doximity is 24.9x, meaning the stock currently trades above this proprietary fair value benchmark. While this does suggest Doximity is valued at a premium, the difference is not dramatic. Given how close these figures are, the stock appears to be priced about right based on this metric.

Result: ABOUT RIGHT

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1422 companies where insiders are betting big on explosive growth.

Earlier we mentioned that there is an even better way to understand valuation. Let’s introduce you to Narratives. In simple terms, a Narrative is the story you believe about a company—what you think its future holds—translated into a set of financial forecasts and a fair value estimate. It connects your unique perspective about Doximity’s business model, industry opportunities, and risks directly to the numbers. This helps you see how different assumptions can impact what the company is actually worth.

Narratives are made easy with Simply Wall St, where millions of investors use the Community page to create, share, and compare their own takes on a company’s future. Each Narrative links a company’s journey from growth drivers like AI-powered workflow tools or digital marketing shifts, through revenue and margin forecasts, all the way to a target price. This allows you to see at a glance how your story aligns with the current market price.

What makes Narratives so powerful is their dynamic ability to update automatically when new information, like earnings or news, comes in. This keeps your valuation fresh and your decisions timely. For example, some Doximity investors are bullish, projecting a fair value as high as $80, focused on AI adoption and digital trends. Others are more cautious, estimating just $55 and emphasizing regulatory or user growth risks. Narratives put the power to decide when to buy, hold, or sell squarely in your hands.

Do you think there’s more to the story for Doximity? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include DOCS.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com