Why GoodRx Stock Soared Today

Shares of GoodRx Holdings (NASDAQ: GDRX) rallied by 20.4% on Thursday after the company announced stronger-than-expected quarterly results and a new stock buyback program.

A solid quarter

In the fourth quarter, GoodRx's revenue grew 7% year over year to $196.6 million, translating to adjusted (non-GAAP) net income of $31.1 million, or $0.08 per share, up from $0.07 per share in the prior-year period. Analysts, on average, were only modeling for earnings of $0.07 per share on slightly lower revenue.

GoodRx ended the quarter with more than 7 million consumers of prescription-related offerings. Prescription transactions revenue in the period rose 11% to $143.9 million, fueled by an 8% increase in monthly active consumers. This more than offset a 6% decline in subscription revenue to $23.1 million -- an expected drop given the sunset of GoodRx's partnership subscription program with Kroger. Revenues from its pharma manufacturer solutions segment fell 2% to $24.4 million.

What's next for GoodRx?

If that wasn't enough, GoodRx's board approved a new $450 million stock repurchase program -- a hefty sum considering the company boasts a market cap of just under $3.2 billion as of this writing. The program has no expiration date, and replaces a previous buyback authorization that expired on Feb. 23.

Finally, for 2024, management forecast that revenue will increase by 7% to roughly $800 million -- well above consensus estimates for revenue of $790 million --and adjusted EBITDA of roughly $250 million.

In the end, this was a solid quarter punctuated by news of a large repurchase authorization and encouraging guidance. GoodRx stock understandably rallied in response.

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.

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 tripled the return of S&P 500 since 2002*.

See the 10 stocks

*Stock Advisor returns as of February 26, 2024

Steve Symington has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends GoodRx. The Motley Fool recommends Kroger. 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.


More Related Articles

Info icon

This data feed is not available at this time.

Sign up for the TradeTalks newsletter to receive your weekly dose of trading news, trends and education. Delivered Wednesdays.