GoodRx (GDRX 1.56%) believes it still has room to grow in the $4 trillion U.S. healthcare market despite its stock getting pummeled. In this clip from "3 Minute Stocks Updates" on Motley Fool Live, recorded on March 30, Motley Fool contributors Rachel Warren and Brian Withers discuss where growth opportunities lie ahead for GoodRx and why its stock could make a comeback.
Rachel Warren: I really like this company, but the market has not been too kind to it. It's been a little bit of a bumpy road, earnings-wise. Something about this company that I love, I love its mission, which is to help Americans get the healthcare they need at a price they can afford. We know that we pay a lot for healthcare in the U.S. and, from coupons, you can use at your local pharmacy to better access to telehealth solutions. GoodRx does it all. A couple of key recent developments I wanted to touch upon, its full-year report, as well as the recent acquisition that it just announced. Overall, it was actually a pretty solid 2021 for the company. Revenue was up 35% year-over-year. Although the company is still operating in a net loss, it is narrowing that net loss. That was about $25.3 million in 2021 compared to $293.6 million in 2020. That was an improvement of 91% year-over-year. The company is profitable on an adjusted net income basis as well as an adjusted EBITDA basis. Cash from operating activities were up 36% in 2021. A couple other key things of note. In the fourth-quarter of 2021, prescription transactions revenue grew 21% year-over-year as GoodRx reported that it had a 14% year-over-year increase in monthly active consumers. It's also seeing really strong growth across its variety of subscription options. In the fourth-quarter, those were up 79% year-over-year. One of their key things that caught my attention was GoodRx, I think just earlier this month, announced they were acquiring a VitaCare, which describes itself as a tech-enabled pharmacy services platform. The goal behind this acquisition, VitaCare is a technology and services platform. It helps patients navigate key access and adherence barriers for brand medications. Again, achieving that goal of more affordable and broader access to brand drugs. There was a study by CoverMyMeds that found that 29% of patients experienced delay in getting their medication because of insurance processes and provider communication delays. Again, GoodRx's mission of expanding affordability and accessibility of prescriptions to Americans is further enhanced by this acquisition and that's going to be an acquisition for $150 million in cash. The company has said that they believe that there are still many opportunities for GoodRx to grow within the massive $4 trillion U.S. healthcare market. I really like this company. The market has been tough on it. There's a lot of ways in which it needs to continue to grow, I think, in order to achieve its goals that it has for its business, but l love what it's trying to do.
Brian Withers: There are lots of great things going on there, Rachel. You are absolutely right. The stock has been pummeled. It's down 40% from its IPO in September 2020 and 60% down from its all-time high. Pretty much just about any investor who's bought into the company is underwater now. Should investors just sell and move on or do you think this company can come back and make investors happy again?
Warren: I think it can come back. I am not personally a shareholder of the company. It's one I've only recently started to look into. I think if I owned it right now, I wouldn't necessarily be a seller. To me, this is still a pretty new company. It's been around for a decade, but it hasn't been publicly traded for a couple of years yet. Super common to see that kind of share price volatility in those early years as a publicly traded company. Plus, the market we've been seeing lately, I think the company has a lot to adjust to consumer industry demands. I think it has a lot to offer. I think the thesis is there. Investors will probably have to wait it out though but I still think it is a solid investment.
