Maintaining Hold: GoodRx’s Steady Performance and Upcoming Investor Day Insights

Analyst Craig Hettenbach of Morgan Stanley maintained a Hold rating on GoodRx Holdings (GDRX – Research Report), retaining the price target of $7.00.

Craig Hettenbach has given his Hold rating due to a combination of factors including GoodRx Holdings’s steady performance and expectations set for the upcoming Investor Day. While the company’s stock has seen a pullback compared to its year-to-date performance against peers, this is attributed more to a reactionary sell-off post-earnings announcement rather than fundamental weaknesses. Hettenbach acknowledges GoodRx’s improving execution over recent quarters, noting that the Investor Day may reveal further growth initiatives and mid-term targets that could provide a clearer picture of the company’s trajectory.

The financials also support the Hold rating, with GoodRx reporting a first-quarter EBITDA that exceeded expectations by 10%, and revenue slightly ahead of consensus. Management’s focus on ramping up the Integrated Prescription Savings (ISP) program and expanding partnerships is seen as a positive move. Despite disruptions from Change Healthcare, the impact on GoodRx’s full-year performance is deemed immaterial. Looking ahead to 2024, the company’s guidance suggests revenue and EBITDA marginally above expectations, with a notable improvement in gross margins. These factors, along with anticipated growth in their pharma manufacturer solutions business, positions GoodRx in a stable light, yet Hettenbach appears to be awaiting more concrete information that could arise from the upcoming Investor Day before considering a rating change.

According to TipRanks, Hettenbach is a 4-star analyst with an average return of 8.7% and a 61.26% success rate.

In another report released on May 10, Goldman Sachs also reiterated a Hold rating on the stock with a $7.50 price target.

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GoodRx Holdings (GDRX) Company Description:

GoodRx Holdings Inc provides digital healthcare platform that provides prescription drugs at affordable prices. The company offers services like diabetes testing, general visits, blood tests, HIV testing, Vitamin D screening, Pregnancy testing, and many more.