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Q1 Earnings Outperformers: Doximity (NYSE:DOCS) And The Rest Of The Vertical Software Stocks


Max Juang /
2024/06/12 3:33 am EDT

Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Doximity (NYSE:DOCS) and the best and worst performers in the vertical software industry.

Software is eating the world, and while a large number of solutions such as project management or video conferencing software can be useful to a wide array of industries, some have very specific needs. As a result, vertical software, which addresses industry-specific workflows, is growing and fueled by the pressures to improve productivity, whether it be for a life sciences, education, or banking company.

The 16 vertical software stocks we track reported a slower Q1; on average, revenues beat analyst consensus estimates by 0.9%. while next quarter's revenue guidance was 2.3% below consensus. Stocks--especially those trading at higher multiples--had a strong end of 2023, but 2024 has seen periods of volatility. Mixed signals about inflation have led to uncertainty around rate cuts, and while some of the vertical software stocks have fared somewhat better than others, they collectively declined, with share prices falling 0.3% on average since the previous earnings results.

Doximity (NYSE:DOCS)

Founded in 2010 and named for a combination of “docs” and “proximity”, Doximity (NYSE: DOCS) is the leading social network for U.S. medical professionals.

Doximity reported revenues of $118.1 million, up 6.4% year on year, topping analysts' expectations by 1.4%. It was a weak quarter for the company, with management forecasting growth to slow and a miss of analysts' billings estimates.

“We were pleased to beat on our top and bottom lines, as we delivered another quarter of strong profits and record engagement,” said Jeff Tangney, co-founder and CEO of Doximity.

Doximity Total Revenue

Doximity delivered the weakest full-year guidance update of the whole group. The stock is up 25.7% since the results and currently trades at $29.87.

Is now the time to buy Doximity? Access our full analysis of the earnings results here, it's free.

Best Q1: Toast (NYSE:TOST)

Founded by three MIT engineers at a local Cambridge bar, Toast (NYSE:TOST) provides integrated point-of-sale (POS) hardware, software, and payments solutions for restaurants.

Toast reported revenues of $1.08 billion, up 31.3% year on year, outperforming analysts' expectations by 3.3%. It was a very strong quarter for the company, with a significant improvement in its gross margin and a solid beat of analysts' billings estimates.

Toast Total Revenue

Toast scored the fastest revenue growth among its peers. The stock is down 4.2% since the results and currently trades at $22.75.

Is now the time to buy Toast? Access our full analysis of the earnings results here, it's free.

Weakest Q1: ANSYS (NASDAQ:ANSS)

Used to help design the Mars Rover, Ansys (NASDAQ:ANSS) offers a software-as-a-service platform that enables simulation for engineering and design.

ANSYS reported revenues of $466.6 million, down 8.4% year on year, falling short of analysts' expectations by 15.9%. It was a weak quarter for the company, with a decline in its gross margin and a miss of analysts' average contract value estimates.

ANSYS had the weakest performance against analyst estimates in the group. The stock is down 0.4% since the results and currently trades at $320.

Read our full analysis of ANSYS's results here.

Upstart (NASDAQ:UPST)

Founded by the former head of Google's enterprise business Dave Girouard, Upstart (NASDAQ:UPST) is an AI-powered lending platform that helps banks better evaluate the risk of lending money to a person and provide loans to more customers.

Upstart reported revenues of $127.8 million, up 24.2% year on year, surpassing analysts' expectations by 2.4%. It was a slower quarter for the company, with underwhelming revenue guidance for the next quarter and a decline in its gross margin.

The stock is up 10.5% since the results and currently trades at $27.04.

Read our full, actionable report on Upstart here, it's free.

PTC (NASDAQ:PTC)

Used to design the Airbus A380 and Boeing 787 Dreamliner commercial airplanes, PTC’s (NASDAQ:PTC) software-as-service platform helps engineers and designers create and test products before manufacturing.

PTC reported revenues of $603.1 million, up 11.2% year on year, surpassing analysts' expectations by 4.6%. It was a slower quarter for the company, with full-year revenue guidance missing analysts' expectations.

The stock is up 0.8% since the results and currently trades at $176.19.

Read our full, actionable report on PTC here, it's free.

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