DOXIMITY INC-CLASS A (NYSE:DOCS) is not too expensive for the growth it is showing.

Discover DOXIMITY INC-CLASS A (NYSE:DOCS), an undervalued growth gem identified by our stock screener. DOCS is shining in terms of growth metrics, and it's also displaying strong financial health and profitability. What's more, it retains an appealing valuation. We'll break it down further.

Assessing Growth for DOCS

ChartMill assigns a proprietary Growth Rating to each stock. The score is computed by evaluating various growth aspects, like EPS and revenue growth. We take into account the history as well as the estimated future numbers. DOCS was assigned a score of 8 for growth:

• DOCS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 42.22%, which is quite impressive.
• The Earnings Per Share has been growing by 81.48% on average over the past years. This is a very strong growth
• The Revenue has grown by 17.46% in the past year. This is quite good.
• Measured over the past years, DOCS shows a very strong growth in Revenue. The Revenue has been growing by 40.87% on average per year.
• DOCS is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 20.64% yearly.
• Based on estimates for the next years, DOCS will show a quite strong growth in Revenue. The Revenue will grow by 15.88% on average per year.

Evaluating Valuation: DOCS

An integral part of ChartMill's stock analysis is the Valuation Rating, which spans from 0 to 10. This rating evaluates diverse valuation factors, including price to earnings and cash flows, while considering the stock's profitability and growth. DOCS has received a 5 out of 10:

• Based on the Price/Earnings ratio, DOCS is valued cheaply inside the industry as 80.56% of the companies are valued more expensively.
• 69.44% of the companies in the same industry are more expensive than DOCS, based on the Price/Forward Earnings ratio.
• Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of DOCS indicates a somewhat cheap valuation: DOCS is cheaper than 66.67% of the companies listed in the same industry.
• DOCS's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. DOCS is cheaper than 66.67% of the companies in the same industry.
• The excellent profitability rating of DOCS may justify a higher PE ratio.
• DOCS's earnings are expected to grow with 20.00% in the coming years. This may justify a more expensive valuation.

Health Insights: DOCS

ChartMill assigns a proprietary Health Rating to each stock. The score is computed by evaluating various liquidity and solvency ratios and ranges from 0 to 10. DOCS was assigned a score of 9 for health:

• DOCS has an Altman-Z score of 48.46. This indicates that DOCS is financially healthy and has little risk of bankruptcy at the moment.
• DOCS has a Altman-Z score of 48.46. This is amongst the best in the industry. DOCS outperforms 100.00% of its industry peers.
• DOCS has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
• A Current Ratio of 8.74 indicates that DOCS has no problem at all paying its short term obligations.
• DOCS's Current ratio of 8.74 is amongst the best of the industry. DOCS outperforms 100.00% of its industry peers.
• A Quick Ratio of 8.74 indicates that DOCS has no problem at all paying its short term obligations.
• Looking at the Quick ratio, with a value of 8.74, DOCS belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.

Looking at the Profitability

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. DOCS was assigned a score of 9 for profitability:

• Looking at the Return On Assets, with a value of 17.18%, DOCS belongs to the top of the industry, outperforming 97.22% of the companies in the same industry.
• The Return On Equity of DOCS (19.53%) is better than 97.22% of its industry peers.
• DOCS has a better Return On Invested Capital (17.38%) than 100.00% of its industry peers.
• DOCS had an Average Return On Invested Capital over the past 3 years of 12.02%. This is above the industry average of 8.72%.
• The last Return On Invested Capital (17.38%) for DOCS is above the 3 year average (12.02%), which is a sign of increasing profitability.
• DOCS has a Profit Margin of 36.60%. This is amongst the best in the industry. DOCS outperforms 97.22% of its industry peers.
• In the last couple of years the Profit Margin of DOCS has grown nicely.
• The Operating Margin of DOCS (40.58%) is better than 100.00% of its industry peers.
• In the last couple of years the Operating Margin of DOCS has grown nicely.
• DOCS has a better Gross Margin (90.19%) than 97.22% of its industry peers.

More Affordable Growth stocks can be found in our Affordable Growth screener.

For an up to date full fundamental analysis you can check the fundamental report of DOCS

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.