Doximity, Inc. Securities Lawsuit Investigation

Shamis & Gentile P.A., a law firm that advocates for investors who are victims of securities fraud, is investigating potential claims against Doximity, Inc. (DOCS)

If you have held Doximity, Inc. securities since at least February 9, 2022, you may be able to pursue remedies on behalf of the Company, at no cost to you.

About Doximity

Doximity operates a digital platform designed primarily for medical professionals, offering networking, communication, and information-sharing tools for physicians and healthcare providers.

The Company generates revenue mainly through targeted advertising and marketing services, connecting pharmaceutical and healthcare companies with its network of physician users.

What's being investigated

On April 17, 2024, a securities fraud class action was filed against Doximity and certain executives covering the period February 9, 2022 through April 1, 2024. The complaint alleges that Doximity made materially false or misleading statements and failed to disclose key risks tied to its dependence on upselling, increasing competitive and macroeconomic headwinds, and slowing customer engagement.

According to the complaint, Doximity overstated the sustainability of its growth and profitability while downplaying its dependence on upselling additional services to existing clients. Executives allegedly told investors that upsell activity remained strong, but the class action complaint contends those upsells were underperforming.

By August 2023, the Company cut its FY24 guidance and announced layoffs, which plaintiffs claim partially revealed the challenges it had concealed.

On this news, Doximity’s stock fell nearly 23% on August 9, 2023. The complaint further highlights an April 1, 2024 report by Jehoshaphat Research that criticized Doximity’s growth story and raised concerns about its revenue practices, leading to additional stock declines.

Key timeline

• February 9, 2022: Alleged class period begins. Doximity emphasized sustainable growth with high margins, which plaintiffs allege did not reflect internal realities.
• November 10, 2022: During an earnings call, executives suggested upsells were not a significant portion of revenue, which plaintiffs allege was misleading.
• May 16, 2023: Doximity raised guidance and expressed optimism about upsell potential, but plaintiffs allege these statements masked underperformance.
• August 8, 2023: Doximity cut FY24 revenue guidance and announced layoffs; stock dropped nearly 23%. Investors allege this was a partial disclosure of previously undisclosed business challenges.
• April 1, 2024: Jehoshaphat Research published a critical report; Doximity stock declined further. Investors say this report revealed concerns about declining sales and aggressive revenue recognition.

Why investors may be concerned

Shareholders allege that Doximity’s board and executives may have misled investors about the durability of its business model by overstating growth and profitability, while underplaying the Company’s reliance on upselling additional services.

They also contend that leadership misrepresented the level of customer engagement and sales momentum, and failed to disclose the impact of competitive and macroeconomic pressures. For long-term stockholders, these issues raise questions about whether Doximity’s directors and officers breached their fiduciary duties of oversight and disclosure, potentially harming the Company itself.

Your Rights and Next Steps

This investigation is focused on whether Doximity’s leadership failed in their responsibilities to the Company. In these cases, shareholders can step in on the Company’s behalf.

Potential next steps:

• Seek corporate reforms to strengthen compliance and governance.
• Pursue recovery of funds or value lost because of alleged misconduct.
• Request court-approved incentive awards for serving as a representative shareholder.

If you have held Doximity shares since at least February 9, 2022, you may have standing to pursue these remedies on behalf of the Company.

How Shareholders Can Take Action Now

Securities investigations are time-sensitive. If you have held Doximity, Inc. shares since at least February 9, 2022, you may be able to seek corporate reforms, the return of funds back to the Company, and a court-approved incentive award for you, all at absolutely no cost.

To join the investigation, complete the form below as soon as possible.