Leerink maintains GoodRx stock Outperform with $9 target

On Thursday, Leerink Partners maintained a positive outlook on GoodRx Holdings Inc. (NASDAQ: GDRX) shares, reiterating an Outperform rating and a $9.00 price target. The firm’s analysts highlighted GoodRx’s solid performance in the first quarter of 2025, noting that the company’s revenue met expectations and its EBITDA and margins exceeded them. According to InvestingPro data, the company maintains impressive gross profit margins of 93.91% and is currently trading below its Fair Value, suggesting potential upside opportunity. Leerink Partners pointed out that GoodRx has been an underappreciated story of margin expansion and believes the first-quarter results, along with the reiterated guidance for the year 2025, support the potential for continued growth in this area.

The analysts acknowledged that Monthly Active Consumers (MACs) declined as anticipated due to shifts in the retail pharmacy landscape, including events like the Rite Aid (NYSE:US90274J5618=UBSS) bankruptcy. Despite these challenges, Leerink found GoodRx’s performance reassuring amidst a volatile market environment. The company’s strong financial position is evidenced by a healthy current ratio of 5.32, indicating liquid assets well exceed short-term obligations. The firm expressed confidence in the core prescription transactions business and the company’s prospects for the rest of the year.

GoodRx stock experienced a significant drop over the past two days, plunging 19.2% compared to a 0.6% decrease in the Nasdaq-100. Leerink suggested this downturn might be a result of market positioning ahead of the earnings results. InvestingPro analysis indicates the stock is currently in oversold territory, with a substantial 18.32% decline in just the past week. For deeper insights into GoodRx’s valuation and 12+ additional ProTips, consider accessing the comprehensive Pro Research Report. The firm sees the first-quarter performance, especially the EBITDA beat and positive outlook, as a strong driver for share recovery, considering the recent sell-off and what Leerink perceives as a highly depressed valuation relative to GoodRx’s profit profile.

Leerink Partners maintains its Outperform rating on GoodRx stock ahead of the company’s earnings call scheduled for tomorrow morning at 8AM ET. The firm’s stance is buoyed by the company’s solid start to 2025 and its ability to navigate through the current retail pharmacy changes while still delivering on financial expectations. With a moderate debt level and analysts projecting profitability this year, GoodRx’s financial health score on InvestingPro is rated as "GOOD," supported by strong cash flow and profit metrics.

In other recent news, GoodRx Holdings Inc. reported its first-quarter revenue of $203.0 million, surpassing the consensus estimate of $202.59 million. The company’s adjusted earnings per share matched analyst projections at $0.09. Despite a 4% decrease in Monthly Active Consumers (MAC), the prescription transactions revenue, which is GoodRx’s largest segment, grew by 2% year-over-year to $148.9 million. GoodRx maintained its full-year 2025 revenue guidance of $810-$840 million, aligning with the analyst consensus of $823.3 million, and slightly increased its adjusted EBITDA outlook to $273-$287 million.

In another development, BofA Securities adjusted its outlook on GoodRx, lowering the stock price target from $4.75 to $4.00 while maintaining an Underperform rating. This decision followed the company’s quarterly results, which, despite exceeding revenue and EBITDA expectations, showed a concerning decline in MAC. BofA Securities cited changes in the retail pharmacy sector as a potential factor for the reduced MAC figures. The firm also revised its CY25E EBITDA multiple for GoodRx from 6.5x to 5.5x, reflecting slower top-line growth momentum. These recent developments have sparked interest among investors and analysts alike.

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