On Thursday, TD Cowen maintained its positive stance on GoodRx Holdings Inc. (NASDAQ: GDRX), reiterating a Buy rating with a price target set at $14.00. The firm's updated outlook follows GoodRx's recent announcement that it has increased its 2024 revenue guidance to a range of $800-$810 million, up from approximately $800 million, and adjusted its EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) expectations to over $250 million from around $250 million.
The revised model from TD Cowen anticipates 2024 revenues of $813 million and an adjusted EBITDA of $258 million for GoodRx, marking an uptick from the previous estimates of $809 million in revenue and $253 million in adjusted EBITDA. The analyst attributed this positive adjustment to sustained growth in Prescription Transaction Revenue (PTR), particularly noting the increasing contributions from In-Store Prescription Savings Programs (ISP), robust growth in Pharmaceutical Manufacturer Solutions (Pharma Man. Sol.), and an enhanced gross margin profile for the first quarter of 2024, now estimated at 93.2% compared to the earlier estimate of 92.0%.
Looking further ahead, TD Cowen projects that GoodRx's revenue will reach $930 million in 2025, with adjusted EBITDA climbing to $336 million. This forecast is based on the expectation of continued growth across all business segments of GoodRx, bolstered by what is anticipated to be a largely fixed operating expense (OpEx) structure.
GoodRx, known for providing prescription savings and price transparency, has evidently been successful in its efforts to expand and enhance its services, as reflected in the raised guidance and the optimistic projections from analysts. The company's strategic focus on growing its PTR and Pharma Man. Sol. segments, coupled with an efficient OpEx management, appears to be paying off, leading to improved profitability expectations for the upcoming years.
InvestingPro Insights
Recent insights from InvestingPro provide a detailed picture of GoodRx Holdings Inc. (NASDAQ: GDRX) that aligns well with the positive sentiment expressed by TD Cowen. The company's management has demonstrated confidence through aggressive share buybacks, and analysts are taking note, with net income expected to grow this year. This optimism is further supported by seven analysts revising their earnings upwards for the upcoming period, a testament to the company's robust financial health.
InvestingPro Data highlights a market capitalization of $2.6 billion and an impressive gross profit margin of 91.68% for the last twelve months as of Q4 2023. These figures exemplify GoodRx's strong positioning in the market. Additionally, the company's recent performance has been notable, with significant returns over the last week, month, and six months, including a 71.4% price total return over the latter period. This performance is suggestive of a positive investor sentiment and market response to the company's strategies and growth prospects.
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