Bank of America Securities analyst Allen Lutz reiterated a Sell rating on GoodRx Holdings yesterday and set a price target of $3.40.
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Allen Lutz has given his Sell rating due to a combination of factors impacting GoodRx Holdings. The company is facing structural challenges in its prescription transaction business, exacerbated by the closure of Rite Aid stores and changes in Medicare benefit designs. Additionally, the evolving pharmacy benefit manager (PBM) landscape, with a shift towards net pricing, is expected to negatively affect GoodRx’s earnings potential.
Despite some growth in the Pharma Manufacturer Solutions segment, which provides a slight offset, the overall outlook remains challenging. GoodRx is attempting to mitigate these headwinds through new revenue streams and improvements in EBITDA margins, but the potential for significant upward revisions in the near term appears limited. Consequently, Lutz reiterates an Underperform rating with a price objective of $3.40, reflecting a cautious stance on the company’s future performance.
GDRX’s price has also changed moderately for the past six months – from $4.690 to $3.330, which is a -29.00% drop .