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.
Should you invest $1,000 in GoodRx right now?
Before you buy stock in GoodRx, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and GoodRx wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $912,352!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
*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.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
