What happened

Shares of GoodRx Holdings (GDRX -0.31%) are down 27.8% this week, according to data from S&P Global Market Intelligence. The digital platform company looks to reduce the costs of prescription drugs to consumers. It closed last week at $5.71, then opened this week at $5.63. It dropped as low as $4.56 on Friday before closing at $4.62. It has a 52-week low of $3.82 and a 52-week high of $42.87. So far this year, the stock is down more than 85%.

So what

The stock began slipping on Nov. 9, the day after it released a disappointing third-quarter report and also issued lowered annual guidance. Then, this week, reacting to that news, several analysts downgraded their price target for the company.

In the report, the company said it had revenue of $187.3 million, down 3% year over year. It also reported a net loss of $41.7 million in the quarter, compared to a net loss of $18.1 million in the same period a year ago.

The company also said it expected total revenue to fall between $175 million to $180 million in the fourth quarter, representing a drop of 18% to 16% over the 2021 Q4 revenue of $213.3 million.

Now what

The biggest reason for the drop was a 16% decline in prescription-transaction revenue, to $131.2 million. The company had been in a monthslong dispute with Kroger, and that dispute was referenced as the "grocer issue" in the earnings report, saying the company's net loss was due to the conflict and additional expenses from its $157 million acquisition in April of pharmacy-services platform vitaCare. During the company's Q3 earnings call, co-founder and co-CEO Doug Hirsch said that Kroger pharmacies are now again welcoming GoodRx discounts, and the revenue from those pharmacies is again rising.

Another positive for the company: While the number of subscribers is down 6% year over year, to 1.1 million, actual revenue from subscriptions was up 63% to $26.5 million because of price increases.

Investors will likely wait to see if the company returns to profitability next quarter before they regain confidence in the stock. If the issue with Kroger is settled and the company can continue to increase profits from subscribers, the company may be pointed in the right direction.