Doximity's (DOCS) double-digit growth rate is sustainable through higher penetration of health care professional marketing, RBC Capital Markets said in a Thursday note, as it initiated coverage on the stock.

The firm said that Doximity is one of the "highest quality" health care technology stocks in the sector with double-digit growth and margins of over 50%.

RBC said that while pharma marketing budgets are under pressure, allocation to health care professional marketing is expected to offset this pressure.

RBC said that increased allocation by Mega brands to health care professional marketing can yield net revenue retention of 113% due to renewals and upsells.

The firm said that concerns surrounding regulatory headwinds and scrutiny from the US Food and Drug Administration into direct-to-consumer marketing are "overdone".

RBC has an outperform rating on the stock and a $59 price target.

Price: 43.81, Change: +0.06, Percent Change: +0.15