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Investing.com - Morgan Stanley (NYSE:MS) lowered its price target on GoodRx Holdings Inc. (NASDAQ:GDRX) to $5.00 from $6.00 on Thursday, while maintaining an Equalweight rating on the healthcare discount provider. The stock, currently trading at $3.47, sits near its 52-week low of $3.31, though InvestingPro analysis suggests the shares may be undervalued at current levels.
The price target reduction follows GoodRx’s second-quarter results, which came in slightly below analyst expectations with revenue of $203 million and EBITDA of $69.4 million, representing a 34.2% margin. These figures were approximately 1.5% below consensus estimates. The company maintains impressive gross profit margins of 93.84%, according to InvestingPro data.
GoodRx’s core prescription transaction revenue segment faced headwinds as monthly active consumers (MACs) declined 14% year-over-year to 5.7 million, which the company attributed to broader changes in the retail pharmacy landscape including store closures and volume reduction from one of its insurance service providers.
The company’s Pharma Manufacturing Solutions business emerged as a bright spot, generating $35 million in revenue, up 32% year-over-year, driven by continued market penetration including growth in consumer direct pricing.
Despite the challenges, GoodRx maintained an active share repurchase program, buying back 10.2 million shares for $46.4 million in the second quarter, with $143 million remaining in its authorization, supported by annual free cash flow of approximately $190 million. InvestingPro highlights management’s aggressive share buybacks as a key strength, with the company showing an attractive free cash flow yield of 11%. Subscribers can access 12 additional ProTips and a comprehensive analysis of GoodRx’s financial health through the Pro Research Report.
In other recent news, GoodRx Holdings Inc. reported its second-quarter earnings for 2025, which did not meet market expectations. The company announced earnings per share of $0.09, slightly below the forecasted $0.10, and revenue of $203.1 million, missing the anticipated $205.87 million. These results highlight challenges in the healthcare environment that the company is facing. Additionally, Goldman Sachs has lowered its price target for GoodRx to $3.75 from $5.00 while maintaining a Neutral rating. This adjustment follows GoodRx’s earnings report and accounts for a recently announced bankruptcy by a major retail pharmacy and the erosion of an integrated savings program. These developments reflect ongoing headwinds in the healthcare sector impacting GoodRx.
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