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Investing.com - Raymond (NSE:RYMD) James downgraded GoodRx Holdings Inc. (NASDAQ:GDRX) from Strong Buy to Outperform and lowered its price target to $5.00 from $9.00 following the company’s second-quarter results. According to InvestingPro analysis, the stock appears undervalued at current levels, with 14 key insights available to subscribers.
GoodRx reported revenue of $203.1 million and adjusted EBITDA of $69.4 million for the second quarter of 2025, which was largely in line with analyst expectations. The company maintains impressive gross profit margins of 94% and a strong current ratio of 4.2, indicating solid financial health.
The company cut its full-year guidance, citing pressure from Rite Aid (NYSE:US90274J5618=UBSS) store closures and actions from pharmacy benefit managers (PBMs) around their insurance savings program business, which are expected to impact revenue by $35-40 million this year.
GoodRx lowered its 2025 revenue guidance to show only an increase from 2024’s $795 million, down from the previous guidance of $810-840 million. The company also reduced its EBITDA guidance to $265-275 million from $273-287 million.
The stock fell 20% on Thursday following the announcement, with Raymond James noting investor frustration over multiple guidance cuts since the company’s analyst day in May 2024. Technical indicators from InvestingPro suggest the stock is now in oversold territory, trading near its 52-week low of $3.31.
In other recent news, GoodRx Holdings Inc. reported its second-quarter earnings for 2025, which fell short of market expectations. The company announced earnings per share of $0.09, slightly below the forecast of $0.10, and revenue of $203.1 million, missing the anticipated $205.87 million. This performance led to a reduction in the stock price target by major financial institutions. Morgan Stanley (NYSE:MS) adjusted its price target to $5.00 from $6.00, maintaining an Equalweight rating, while Goldman Sachs lowered its price target to $3.75 from $5.00, keeping a Neutral rating. The earnings report also highlighted challenges in the healthcare environment, including a bankruptcy by a major retail pharmacy and issues with an integrated savings program. GoodRx’s revenue of $203 million and EBITDA of $69.4 million, representing a 34.2% margin, were approximately 1.5% below consensus estimates. These developments reflect the ongoing challenges faced by GoodRx in navigating the current healthcare landscape.
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