GoodRx Holdings Faces Sell Rating Amid Decline in Consumer Growth and Cautious Revenue Outlook

In a report released yesterday, Allen Lutz from Bank of America Securities reiterated a Sell rating on GoodRx Holdings (GDRX – Research Report), with a price target of $4.00.

Allen Lutz has given his Sell rating due to a combination of factors impacting GoodRx Holdings. The company’s recent performance showed a decline in monthly active consumers, which fell short of expectations and marked a decrease from the previous quarter. This decline is concerning as it typically sees an increase during this period due to deductible resets and greater reliance on cash cards. The company attributes this drop to changes in the retail pharmacy landscape, including store closures and the introduction of new pharmacy reimbursement models.
Additionally, while GoodRx’s revenue and adjusted EBITDA exceeded expectations, the outlook for future revenue growth appears cautious. The company has maintained its revenue guidance for 2025, but management’s confidence is skewed towards the lower end of the range. This cautious revenue outlook, combined with the challenges in maintaining consumer growth, has led to a reduction in the price objective and a more conservative EBITDA multiple, reinforcing the Sell rating.

Lutz covers the Healthcare sector, focusing on stocks such as Hims & Hers Health, Teladoc, and CVS Health. According to TipRanks, Lutz has an average return of 9.3% and a 62.81% success rate on recommended stocks.