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GoodRx Holdings: Expensive, But A Quality Prospect

Mar. 04, 2021 2:42 PM ETGoodRx Holdings, Inc. (GDRX)14 Comments


  • GoodRx continues to demonstrate that it's a strong company with excellent long-term potential.
  • Its continued bottom line performance is encouraging and it's rare for a company like this.
  • Shares are very expensive, though, and as a result, it may take a long time for this company to play out for bulls.
  • Looking for a helping hand in the market? Members of Crude Value Insights get exclusive ideas and guidance to navigate any climate. Get started today »

One of the most interesting companies on the market today has got to be GoodRx Holdings (NASDAQ:GDRX). GoodRx was founded on the concept of trying to do well for itself and its investors by doing good for society. The company enables the users on its app to find the lowest-priced prescriptions and other medications at nearby pharmacies. Management has built out a wide array of other functions that allows shareholders monetization opportunities. At present, the company is valued at $17.4 billion, but the fact of the matter is that shares are trading quite a bit lower than their 52-week high. All things considered, the company does look to be rather expensive still, but if recent growth continues and the company grows its cash flow over time, then this premium price tag might well be worth it.

A look at GoodRx

As I stated, GoodRx was founded on the idea of providing discounted options for medications at nearby pharmacies. Although this may not sound significant, it is. Management estimates that 5.8 billion 30-day equivalent prescriptions are written in the US every year. That works out to a market opportunity of $360 billion. What's more, the industry is slated to grow at a rate of 5.7% per annum through at least 2028. That would take the opportunity to more than $560 billion annually.

The most recent data available indicates that consumers who took there GoodRx code to a local pharmacy saved, on average, more than 70% on the list price of the drugs that they acquired. Through the third quarter of its 2020 fiscal year, this amounts to savings of more than $20 billion. The company also has built up a rather significant network. Its platform touches on 150 billion price points in more than 70,000 pharmacies. This has attracted more than 15 million monthly visitors to the platform.

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This article was written by

Daniel Jones profile picture
Robust cash flow analyses of oil and gas companies

Daniel is an avid and active professional investor. He runs Crude Value Insights, a value-oriented newsletter aimed at analyzing the cash flows and assessing the value of companies in the oil and gas space. His primary focus is on finding businesses that are trading at a significant discount to their intrinsic value by employing a combination of Benjamin Graham's investment philosophy and a contrarian approach to the market and the securities therein.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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