Why GoodRx Holdings Stock Was Sinking This Week

Source The Motley Fool

Over the past few days, the news from GoodRx Holdings (NASDAQ: GDRX) hasn't been all that good. On Thursday the online pharmacy operator posted an unsatisfying set of quarterly results. Investors reacted by trading the company's stock down, and it was in the red by nearly 19% week to date as of early Friday morning, according to data compiled by S&P Global Market Intelligence.

The good news -- there was growth

For the third quarter, GoodRx booked revenue of just over $195.3 million, representing growth of 8% over the same period of 2023. Non-GAAP (adjusted) net income was $31.9 million, or $0.08 per share, a meaty 25% improvement year over year.

Yet it wasn't meaty enough for the analysts tracking GoodRx stock. They were collectively modeling a slightly higher per-share, adjusted net income figure of $0.09. The company also missed narrowly on the top line, as those pundits' average estimate was nearly $195.7 million.

Management attributed the gains to a rise in its foundational prescription transactions, which rose 4% to over $140 million in the quarter. This was helped by an uptick in monthly active consumers, a key operational metric for the online operator. Their ranks grew to 6.5 million from the year-ago tally of $6.1 million. A smaller business, pharma manufacturer solutions, saw its revenue balloon 77% to over $28 million.

Revenue guidance came up short

Those trailing results probably weren't deserving of such a sell-off, but combined with GoodRx's revenue guidance they were dismaying. Management is expecting roughly $200 million in revenue for its current (fourth) quarter; this, however, would mean tepid growth of only around 2%. This figure also sits below the consensus analyst projection of $206 million.

As for the full year; revenue should grow by 6% to $794 million. Again, though, that comes up short against the collective pundit estimate, in this case almost $801 million.

GoodRx isn't doing as badly as the sell-off might indicate, but in a world of growing competition -- a recent example being Amazon's push into same-day pharmaceutical delivery -- I don't see it as a great buy for the future.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

  • Amazon: if you invested $1,000 when we doubled down in 2010, you’d have $23,324!*
  • Apple: if you invested $1,000 when we doubled down in 2008, you’d have $42,133!*
  • Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $420,761!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

See 3 “Double Down” stocks »

*Stock Advisor returns as of November 4, 2024

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon. The Motley Fool recommends GoodRx. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Gold is on track for 2% weekly lossGold lost more ground on Friday, putting the precious metal on course for its sharpest weekly slide in almost two months.
Author  Cryptopolitan
13 hours ago
Gold lost more ground on Friday, putting the precious metal on course for its sharpest weekly slide in almost two months.
placeholder
Bitcoin Profit Taking Explodes: 12x More Gains Than Losses Hitting ExchangesOn-chain data shows the ratio between the Bitcoin profit and loss being sent to exchanges is approaching euphoric bull market levels.
Author  Bitcoinist
13 hours ago
On-chain data shows the ratio between the Bitcoin profit and loss being sent to exchanges is approaching euphoric bull market levels.
placeholder
ADA and AVAX share bearish outlooks after the SEC delays ETFsCardano (ADA) and Avalanche (AVAX) are down 5% to 8% in the last 24 hours, respectively, at press time on Friday, in the aftermath of the US Securities and Exchange Commission (SEC) delaying the decission over the Cardano and Avalanche Exchange Traded Funds (ETFs) filings on Wednesday.
Author  FXStreet
14 hours ago
Cardano (ADA) and Avalanche (AVAX) are down 5% to 8% in the last 24 hours, respectively, at press time on Friday, in the aftermath of the US Securities and Exchange Commission (SEC) delaying the decission over the Cardano and Avalanche Exchange Traded Funds (ETFs) filings on Wednesday.
placeholder
Tariff Uncertainty Rises Again, Stocks SlideAsian stocks were mostly lower on Friday as global tariffs faced uncertainty again.
Author  Insights
14 hours ago
Asian stocks were mostly lower on Friday as global tariffs faced uncertainty again.
placeholder
Pound Sterling corrects against US Dollar after US court reinstates Trump tariffsThe Pound Sterling (GBP) drops to near 1.3475 against the US Dollar (USD) in Friday’s European trading session.
Author  FXStreet
14 hours ago
The Pound Sterling (GBP) drops to near 1.3475 against the US Dollar (USD) in Friday’s European trading session.
goTop
quote