Credit Suisse https://www.credit-suisse.com, hosted Karsten Voermann, CFO and Arik Moav, VP Finance for GoodRx (GDRX) https://www.goodrx.com, for an in person NDR in New York City.
Coming out of the NDR, Credit Suisse analysts are incrementally more bullish on some of the strategic initiatives GoodRX has underway (e.g., aggregating demand outside of DTC channels) and opportunities to scale a nascent but highly attractive Pharma Solutions business. As a result, Credit Suisse analysts are raising their TP to $52 (vs. $45, previously).
GDRX has several strategic initiatives underway, which may not be fully appreciated given the NT headwinds associated with COVID-19. While GDRX has reached their scale today largely by DTC channels, the company is increasing the number of affiliate partners and channels outside of DTC to drive “demand aggregation”.
Notable examples include ScriptCycle (a company GDRX acquired that partners directly with pharmacies for discount care solutions). GoHealth, DoorDash, and RxNXT (a small company GDRX acquired that integrates third-party insurance and cash-pay prices for employers/health plans.)
GDRX has a unique and compelling opportunity to move further upstream in the prescriber process with their recent/exclusive partnership with Surescripts. The integration presents GDRX with an opportunity to remove friction for patients as an Rx can be sent to the lowest cost pharmacy from the outset. While Surescripts integration is live today, GDRX expects an evolution of the capabilities as certain EHRs will require an update for it to be pushed out.
GDRX notes that the Delta variant has not had as much impact as it once might have been feared. Hospitals which have continued to be the most impacted by new variants and hospitalizations, are relatively less relevant for GDRX business trends.
The majority of prescriptions are written outside of a hospital setting (in addition to the majority of chronic medications, which are an important part of the GoodRx business model), and unlike the Spring of 2020, physician offices have continued to remain open.
Credit Suisse analysts reiterate OUTPERFORM with $52 TP. The analysts TP of $52 is based on 16.5x (previously 14x) our 2023 revs. Risks include regulations affecting GDRX directly or partners, and increased competition.
To ask questions, provide feedback, or news, email Jailendra Singh at jailendra.singh@credit-suisse.com or call 212-325-8121.