Our enterprise is “completely stable” and simply retains getting higher
GoodRx co-CEO Doug Hirsch on Friday expressed confidence in the company’s outlook, telling CNBC that the recent acquisitions will help expand the business offering as it approaches a post-pandemic healthcare landscape.
A day earlier, GoodRx reported a 20% increase in revenue for the first quarter, up from $ 133.4 million a year ago to $ 160.4 million. Net income was $ 1.7 million, a sharp decrease from $ 27.3 million in the first quarter of 2020. However, the company that offers customers coupons for prescription drugs said the most recent number was due to stock-based Compensation expense of $ 46.5 million was impacted.
GoodRx’s shares rose roughly 10% on Friday.
“We are switching from the Covid crisis to the other health crisis in which people simply cannot afford their care,” said Hirsch in an interview on “The Exchange”. “We feel that our business is absolutely solid and is getting better and better.”
Two recent deals improve GoodRx’s position, Hirsch said. The first is RxSaver, which also offers prescription coupons to users. Hirsch said the acquisition – allegedly for $ 50 million – brings “a complementary business to ours”. It also offers marketing benefits, he said.
The other acquisition was HealthiNation, which produces information videos on health topics. The content is created by doctors and health professionals, Hirsch said. While GoodRx has had educational content for years, Hirsch said it mainly focuses on the written word.
“A lot of consumers enjoy watching videos,” he said, adding that it also allows GoodRx to sell advertisements to manufacturers for revenue. “It’s a win-win situation for everyone.”
GoodRx’s previous acquisitions included telemedicine provider HeyDoctor in 2019. The company renamed it GoodRx Care in March.
Despite the positive performance on Friday, GoodRx stock has struggled to gain ground since going public in September. The IPO was $ 33 per share and the first session ended at $ 50.50 apiece.
The stock was trading at around $ 31 on Friday, bringing GoodRx’s market cap to just over $ 12 billion.
Competition from much larger competitors – Amazon in particular – is a big problem for some on Wall Street. For example, GoodRx shares fell 22.5% in one session in November after the e-commerce giant revealed plans for Amazon Pharmacy that marked the most significant move in the space.
Hirsch downplayed the threat Amazon poses to GoodRx, which he co-founded in 2011. “People see it as head to head with us, but it’s not like that,” he told CNBC in November.
Of the nine analyst prospects available on FactSet, only one has a sell rating on GoodRx stock while four have a buy rating. The other analysts rate the share as a hold.
Hirsch doubled its bullish outlook on Friday, saying, “Put the markets aside because our business is both durable and highly predictable.”
“Most of the people who use GoodRx have chronic conditions so they take prescriptions all the time. They show up at this pharmacy every month. We have a very reliable source of income, and again we open up new sources of income and new ways of communicating with us the consumers, “he said.