GDRX - GoodRx: Encouraging Profit Stabilization (Rating Upgrade)

2024-05-28 01:32:25 ET

Summary

• GoodRx has seen a ~30% increase in its share price this year due to fundamental improvements and raised growth outlook.
• The company has seen a rebound in pharmacy transactions, leading to two straight quarters of revenue growth after spending 2023 in a declining mode.
• Despite transactional strength, GDRX is losing subscribers from the sunsetting of its Kroger Savings Club subscriptions.
• The stock trades at a decently valued ~11x forward adjusted EBITDA multiple.

It's been a tough environment for small-cap stocks, but a few select names have been able to buck the trend. GoodRx ( GDRX ) is among them: the discounted prescription drug savings app has seen nearly a ~30% jump in its share price year to date, driven by several fundamental improvements the company has made. Alongside raising its full-year growth outlook, the company has also boosted its long-term adjusted EBITDA margin forecast and reaffirmed its commitment to returning as a "Rule of 40" company....

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