Bragar Eagel & Squire, P.C. Reminds Investors That Class Action Lawsuits Have Been Filed Against Luna, HireRight, and Doximity Innovations and Encourages Investors to Contact the Firm

NEW YORK, April 21, 2024 (GLOBE NEWSWIRE) -- Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, reminds investors that class actions have been commenced on behalf of stockholders of Luna Innovations, Inc. (NASDAQ: LUNA), HireRight Holdings Corporation (NYSE: HRT), and Doximity, Inc. (NYSE: DOCS). Stockholders have until the deadlines below to petition the court to serve as lead plaintiff. Additional information about each case can be found at the link provided.

Luna Innovations, Inc. (NASDAQ: LUNA)

Class Period: August 11, 2023 - March 25, 2024

Lead Plaintiff Deadline: May 31, 2024

According to the lawsuit, defendants throughout the Class Period made materially false and/or misleading statements and/or failed to disclose that: (1) Luna Innovations’ financial statements from August 10, 2023 to the present included false figures as a result of improper revenue recognition; (2) as a result, Luna Innovations would need to restate its previously filed financial statements from August 10, 2023 to November 14, 2023; (3) Luna Innovations lacked adequate internal controls; and (4) as a result, defendants’ statements about its business, operations, and prospects, were materially false and misleading and/or lacked a reasonable basis at all times. 

For more information on the Luna Innovations class action go to: https://bespc.com/cases/LUNA

HireRight Holdings Corporation (NYSE: HRT)

Class Period: pursuant and/or traceable to the Offering Documents issued in connection with HireRight’s October 2021 initial public offering (the “IPO” or “Offering”)

Lead Plaintiff Deadline: June 3, 2024

HireRight provides technology-driven workforce risk management and compliance solutions to a customer base characterized as a “diverse set of organizations, from large-scale multinational businesses to small and medium-sized businesses, across a broad range of industries.” The Company offers background screening, verification, identification, monitoring, and drug and health screening services for customers under the HireRight brand name and boasts a purportedly “robust pipeline of opportunities developed by [its] sales team to continue to attract new customers and take share in the market.” 

On October 6, 2021, HireRight filed a registration statement on Form S-1 with the SEC in connection with the IPO, which, after an amendment, was declared effective by the SEC on October 28, 2021 (the “Registration Statement”). 

On November 1, 2021, HireRight filed a prospectus on Form 424B4 with the SEC in connection with the IPO, which incorporated and formed part of the Registration Statement (the “Prospectus” and, collectively with the Registration Statement, the “Offering Documents”). 

That same day, pursuant to the Offering Documents, HireRight’s common stock began publicly trading on the New York Stock Exchange (“NYSE”) under the ticker symbol HRT. 

Pursuant to the Offering Documents, HireRight issued approximately 22. million shares of its common stock to the public at the Offering price of $19.00 per share for proceeds to the Company of approximately $399 million after applicable underwriting discounts and commissions, and before expenses. 

According to the complaint, the Offering Documents were negligently prepared and, as a result, contained untrue statements of material fact or omitted to state other facts necessary to make the statements made not misleading and was not prepared in accordance with the rules and regulations governing its preparation. Specifically, the Offering Documents made false and/or misleading statements and/or failed to disclose that: (i) HireRight was exposed to customers with significant employment and hiring risk and the Company derived greater revenue growth from existing client hiring than from new client hiring; (ii) as a result, the Company’s revenue growth was unsustainable to the extent that it relied on the stability of its current customers’ hiring and/or the profitability of securing new customers; (iii) accordingly, HireRight had overstated its post-IPO business and/or prospects; and (iv) as a result, Defendants’ statements about the Company’s business, operations, and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times. 

On January 19, 2023, Stifel, a brokerage and investment banking firm, downgraded HireRight’s stock from a Hold to a Buy, prompting several market analysts to issue publications discussing the downgrade. For example, Seeking Alpha reported that Stifel found HireRight to be exposed to large technology firms where there is more acute employment and hiring risk, and that more of the Company's growth comes from existing client hiring than from new. 

On this news, HireRight’s stock price fell $0.88 per share, or 7.5%, to close at $10.75 per share on January 19, 2023

At the time of the Complaint's filing, HireRight’s common stock continue to trade below the $19.00 per share IPO price.

For more information on the HireRight class action go to: https://bespc.com/cases/HRT

Doximity, Inc. (NYSE: DOCS)

Class Period: February 9, 2022 - April 1, 2024 (Common Stock Only)

Lead Plaintiff Deadline: June 17, 2024

Doximity operates a digital platform that provides connections between, medical information to, and patient scheduling tools for medical professionals. The Class Period begins on February 9, 2022, when Doximity released its quarterly financial results for the third quarter of fiscal year 2022, after the market closed the night prior. During the accompanying quarterly investor earnings call afterhours on February 8, 2022, Defendant Anna Bryson, the Company’s Chief Financial Officer, emphasized that “marketers have been able to witness the value of running these digital programs” and that it was this “value that’s the main reason we’re seeing this sustained demand from our customers and not new [COVID] variants.”  To this end, Defendant Bryson further assured investors that the Company was “focused on . . . really building a business that can provide years of sustainable growth with high margins.”

The complaint alleges that, throughout the Class Period, Defendants continued to tout the sustainability of the Company’s business prospects while also downplaying the importance of customer upsell rates on the Company’s financial performance. For example, during the Company’s second quarter fiscal year 2023 investor earnings call on November 10, 2022, Defendant Jeffrey Tangney, the Company’s Chief Executive Officer, reassured investors that “pharma’s doing quite well” amid investor concerns that macroeconomic headwinds would substantially impact Doximity’ financial performance. Defendant Bryson similarly emphasized that the Company’s sales pipeline has “bigger dollar deals than we’ve seen before” and, to alleviate investor concerns, explained that, while Doximity’s upsell rates were “a little below historical norms,” customer upsells are “not a significant portion of our revenue.”

Similarly, in February 2023, Defendant Bryson specifically noted that Doximity is “less dependent on major upsell than prior years,” and in May 2023, Defendant Bryson indicated that the Company was being conservative with its financial guidance to the market by assuming upsell rates of “half of our historical [upsell] rate.”

The complaint further alleges that notwithstanding Defendants’ claims regarding the sustainability of Doximity’s growth and profitability, investors began to learn the truth on August 8, 2023, when, after the market closed, Doximity reported its financial results for the first quarter of fiscal year 2024, which ended June 30, 2023. 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. Specifically, Doximity announced that it expected fiscal year 2024 revenue of between $452 million and $468 million (down from prior guidance of between $500 million and $506 million, and representing year-over-year revenue growth of only between 7.9% and 11.7%), and adjusted EBITDA of between $193 million and $209 million (down from prior guidance of between $216 million and $222 million, and representing year-over-year adjusted EBITDA growth of only between 4.9% and 13.6%). In conjunction with the disappointing guidance, Doximity announced that it would reduce its workforce by approximately 10%. The Company further noted that the workforce reduction is expected to cost approximately $8 million to $10 million.

In explaining this about-face, Defendant Bryson admitted that the Company’s “major upsells have materially underperformed, and we expect this to continue in the near term.” Defendant Tangney further explained that 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 $7.49 per share, or nearly 23%, from a close of $32.79 per share on August 8, 2023, to close at $25.30 per share on August 9, 2023.  

Investors learned more about the unsustainability of the Company’s revenue growth on April 1, 2024, when 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 $1.11 per share, or more than 4% over two trading-days, from a close of $26.91 per share on March 28, 2024, to close at $25.80 per share on April 2, 2024.

The Complaint further alleges that, throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts, about the Company’s business and operations. Specifically, Defendants 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 Doximity’s reliance on “upselling” products and services (such as additional advertising) to existing customers to sustain the Company’s performance and future growth.

For more information on the Doximity class action go to: https://bespc.com/cases/DOCS

About Bragar Eagel & Squire, P.C.:

Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York, California, and South Carolina. The firm represents individual and institutional investors in commercial, securities, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.

Contact Information:

Bragar Eagel & Squire, P.C.
Brandon Walker, Esq.
Marion Passmore, Esq.
(212) 355-4648
[email protected]
www.bespc.com