NEW YORK, May 07, 2024 (GLOBE NEWSWIRE) -- The law firm of Kirby McInerney LLP announces that a class action lawsuit has been filed in the U.S. District Court for the Northern District of California on behalf of those who acquired Doximity, Inc (“Doximity” or the “Company”) (NYSE: DOCS) securities during the period of February 9, 2022 through April 1, 2024, inclusive (“the Class Period”). Investors have until June 17, 2024 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
[Click here to learn more about the class action]
On August 8, 2023, Doximity reported its financial results for the first quarter of fiscal year 2024. While the Company exceeded its quarterly revenue and adjusted EBITDA guidance for the first quarter, the Company provided disappointing guidance for the second quarter of fiscal year 2024 and slashed its guidance for the full fiscal year 2024. In conjunction with the disappointing guidance, Doximity announced that it would reduce its workforce by approximately 10%, a move that was expected to cost approximately $8 million to $10 million. In explaining this about-face, Doximity CFO Anna Bryson admitted that the Company's “major upsells have materially underperformed, and we expect this to continue in the near term.” According to Jeffrey Tangney, the Company’s CEO, Doximity failed to close sales due, in part, to “fewer face-to-face meetings with our clients.” On this news, the price of Doximity common stock declined by $7.49 per share, or approximately 23%, from $32.79 per share on August 8, 2023, to close at $25.30 per share on August 9, 2023.
On April 1, 2024, Jehoshaphat Research published a report alleging, among other things, that “Doximity's underlying sales . . . are declining at a negative -3-6% rate, but that this decline has been masked through accelerated revenue recognition.” On this news, the price of Doximity common stock declined by $1.11 per share over two trading-days, from $26.91 per share on March 28, 2024, to close at $25.80 per share on April 2, 2024.
The lawsuit alleges that, throughout the Class Period, Doximity repeatedly touted the Company's business prospects and the sustainability of the Company's revenue growth and profitability, while downplaying the impact of competition and tightening macroeconomic conditions on the Company and its reliance on "upselling" products and services (such as additional advertising) to existing customers to sustain the Company's performance and future growth.
If you purchased or otherwise acquired Doximity securities, have information, or would like to learn more about this investigation, please contact Thomas W. Elrod of Kirby McInerney LLP by email at investigations@kmllp.com, or by filling out this CONTACT FORM, to discuss your rights or interests with respect to these matters without any cost to you.
Kirby McInerney LLP is a New York-based plaintiffs’ law firm concentrating in securities, antitrust, whistleblower, and consumer litigation. The firm’s efforts on behalf of shareholders in securities litigation have resulted in recoveries totaling billions of dollars. Additional information about the firm can be found at Kirby McInerney LLP’s website.
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Contacts
Kirby McInerney LLP
Thomas W. Elrod, Esq.
212-699-1180
https://www.kmllp.com
investigations@kmllp.com
