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GoodRx Analysts Initiate Coverage With Mix of Buys and Holds

GoodRx, the online prescription platform, went public last month and has jumped 55% from its IPO price. Analysts have now initiated coverage.
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GoodRx  (GDRX)  shares fell Monday after the online-prescription-shopping platform received four buy ratings and four holds from analysts who initiated ratings on the company.

The bullish analysts see a huge potential customer base for GoodRx, which went public last month. The neutral analysts express concern about valuation, given GoodRx’s 55% surge from its $33 initial-public-offering price. 

The Santa Monica, Calif., company's shares recently traded at $50.55, down 4.7%.

Morgan Stanley analyst Ricky Goldwasser rates GoodRx overweight with a $57 share-price target.

“GoodRx is the largest healthcare-focused Internet platform that provides users access to prescription drug discounts nationwide,” she wrote in a commentary. 

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“Leveraging its Internet platform and relationships with health-care stakeholders, GoodRx has unbundled traditional pricing mechanism to create a more equitable cash prescription marketplace for consumers filling generic scripts.”

Goldwasser added, “The company is in early phases of expanding into subscription prescription offering, telehealth services, and manufacturers solutions, a $47 billion market opportunity. Building on its established brand, monthly visitors are the foundation for future growth opportunities.”

J.P. Morgan analyst Doug Anmuth rates GoodRx neutral with a $59 price target.

“We believe GDRX warrants a premium given its scale, strong top-line growth featuring highly recurring revenue, and proven profitability with low” capital spending, he wrote in a commentary. 

But “significant share appreciation from current levels will require multiple quarters of strong execution and estimate increases as [the] shares are approaching fair value.”

Anmuth added, “Our December 2021 share-price target of $59 is based on about 25 times 2022 estimated revenue of about $1.03 billion vs. competitors trading at 19 times on average.”