GoodRx Holdings, Inc. operates the nation’s largest online platform providing users free access to drug pricing information and pharmacy discounts. After a well-received IPO, the shares fell on Amazon.com, Inc.’s announcement that it has entered the online pharmacy space.
Although Amazon is a formidable rival, its success is not assured, as its participation is limited to the low-penetration mail-order segment of the market. On the other hand, GoodRx has the advantages of being the leading brand in its space, best pricing, a tie-in with its telehealth unit, and developing opportunities in referrals from drug manufacturers.
This company’s growth has been phenomenal, 54 percent compound annual growth rate for the last five years. This company is highly profitable. Its adjusted EBITDA rate is around 40%. GDRX reported a smaller net income of 1.6 million, but almost all of that is due to stock-based compensation related to the IPO. They actually produced about $43 million in free cash flow for the quarter.
On May 13, Vericast Corp. sold its pharmaceutical company RxSaver to GoodRx Holdings for $50 million. RxSaver enables comparisons of prescription drug prices among drugstores.
The health protection company is one of the best stocks to own, according to Brian Higgins. The stock accounts for about 1.45% of King Street Capital’s portfolio, as the hedge fund owns a $19.51 million stake in the company.