Stress Testing DOCS: Historical Drawdowns and Macro Risks

Stress Testing DOCS: Historical Drawdowns and Macro Risks

Every seasoned investor knows that market shocks are inevitable. What matters is the depth of the hit. Historically, across 5 major crises, Doximity (DOCS) absorbs an average drawdown of -29% vs. the S&P 500's average decline of -13% over the same events.

If you are an investor in DOCS stock, you might be asking: if the macroeconomic environment fractures, how far can this stock actually fall?

One of the ways to understand this is to simply see how the stock has performed during past market crashes.

How Does It Handle Rate & Valuation Shock?

2022 Inflation Shock & Fed Tightening (Jan 2022 to Oct 2022)

• CPI hit 9.1%, forcing aggressive tightening since Volcker. Russia's invasion of Ukraine further spiked global energy and food prices.
• Stocks and bonds fell simultaneously, eliminating the 60/40 hedge. Rising rates crushed long-duration assets until CPI declined in October 2022.

DOCS stock experienced -53% drawdown during this event, compared to -24% for the S&P and -35% for bonds.

What Happens During Sovereign & Geopolitical Risk?

2025 US Tariff Shock (Feb 2025 to Jun 2025)

• The Trump administration announced 145% tariffs on Chinese imports on April 2, 2025, representing the most aggressive trade action since the 1930s.
• Equities and the dollar fell simultaneously, signaling lost confidence. Supply chain disruptions and small-cap input inflation drove broad declines, affecting nearly all sectors.

DOCS stock saw -34% drawdown vs -19% for the S&P and -3.8% for bonds.

How It Fares During Credit & Liquidity Crises?

2023 SVB Regional Banking Crisis (Feb 2023 to Jul 2023)

• SVB's long-duration Treasury portfolio was destroyed by rising rates. A March 8, 2023 loss disclosure triggered an instantaneous bank run accelerated by social media.
• The FDIC seized SVB, Signature, and First Republic. Contagion was contained through deposit backstops and the Fed's Bank Term Funding Program emergency liquidity.

The drawdown for DOCS stood at -12% compared to -6.7% for the S&P and -4.3% for bonds.

Past Market Shock Drawdowns Summarized For DOCS

[1] 2022 Inflation Shock & Fed Tightening: 9.1% CPI forced aggressive rate hikes, crushing both stocks and bonds simultaneously.
[2] 2023 SVB Regional Banking Crisis: SVB's rate-driven bond losses triggered a social-media bank run, seized by FDIC.
[3] Summer-Fall 2023 Five Percent Yield Shock: Strong economic data pushed 10-year yields to 5%, compressing yield-sensitive sector valuations.
[4] 2024 Yen Carry Trade Unwind: BOJ rate hike unwound yen carry trades, briefly crashing tech stocks globally.
[5] 2025 US Tariff Shock: 145% China tariffs crashed equities and the dollar on supply chain disruption fears.

So What Can You Do For Your Investments?

Panic is a failure of preparation. When a Rate & Valuation Shock shock hits, DOCS will contract predictably. Recognizing this behavior as a mathematical feature rather than a flaw allows investors to avoid selling at the exact wrong moment.

Incorporating a rule-based and diversified approach, such as the Trefis High Quality Portfolio (HQ), ensures your capital is protected enough to ride out these inevitable structural resets. HQ has returned > 105% since inception.