Prescription drug price comparison platform GoodRx (NASDAQ:GDRX) has a noble mission of helping people to locate the medications they need at the best available price. It’s an idea whose time has come, and I’m glad to see that the recent initial public offering (IPO) of GoodRx stock was accompanied by heavy trading volume.
InvestorPlace contributor Joel Baglole even went so far as to put GoodRx stock at the top of his list of telehealth stocks that are paving the digital medicine landscape. Baglole’s article is outstanding and I recommend that you check out all of the stocks on his list, including GoodRx.
What GoodRx proves is that telehealth comes in many forms. It’s not just about doctors talking to patients on their laptops. Telehealth can also help patients find places to buy their prescription drugs. And, GoodRx is working to improve how this is done.
Still, there’s more to investing than getting a warm, fuzzy feeling. You’ll also want to be confident in the company’s business model. Fortunately, I believe you’ll like what you see when you take a closer look at GoodRx.
A Closer Look at GoodRx Stock
As reported by InvestorPlace contributor Sarah Smith, GoodRx anticipated that it would price its stock shares between $24 and $28. The IPO took place on Sept. 23 on the Nasdaq exchange.
The actual IPO price for GoodRx stock ended up being $33 per share. However, the stock didn’t stay at that price. In fact, GoodRx shares actually started trading on the Nasdaq at $46.
By the end of its first public trading day, GoodRx stock was up an eye-popping 53%. The stock closed at $50.50 per share, bringing GoodRx’s market cap to roughly $19.4 billion.
Checking the share price on the morning of Oct. 19, GoodRx stock was trading slightly above $51. Is it possible that the bulls have already run out of steam? Perhaps they’re just taking a breather before the next leg up. Who could blame them after such an outstanding IPO day?
Essential Changes
If there’s anything that could use a major change, it’s America’s health care system. This is particularly true during the age of Covid-19. Thankfully, GoodRx Co-CEO and cofounder Doug Hirsch is prepared to transform at least one aspect of American health care.
2020 saw a boom in virtual health care, and GoodRx has been part of that explosion as it occupies a unique niche in telemedicine. As Hirsh sees it, “Healthcare [in America] is so broken and so messed up… that there’s an opportunity for us to help people and create a successful business opportunity along the way.”
Interestingly, Hirsh isn’t an IPO veteran. He admitted, “This is my first time going through an IPO and it is definitely arduous and painful at times.”
Yet, given the astounding performance of GoodRx stock during its debut on the Nasdaq, it’s safe to say that Hirsh’s first IPO is a resounding success.
But Is It Profitable?
By now, hopefully you’ll start to feel pretty good about investing in a forward-thinking company like GoodRx. Yet, prospective investors have every right to ask whether the company is actually profitable.
On that front, there should be no major concerns about GoodRx. The company has consistently been profitable since 2016. Moreover, during the first six months of 2020, GoodRx earned $55 million in profits. That number represents an increase of $31 million compared to the company’s profits from the first half of 2019.
Not only that, but GoodRx recorded $257 in revenues for the 2020’s first half. That’s a marked improvement in comparison to the $173 million in revenues posted during 2019’s first six months.
Is the vast improvement in GoodRx’s fiscal stats entirely attributable to Covid-19? That’s a debatable issue, but I’m sure that the pandemic has been a contributing factor.
Still, the country’s broken health care system and overpriced medications have needed solutions for a long time. As long as these issues persist, GoodRx should continue to be profitable.
The Bottom Line
It should give investors a good feeling to own shares of GoodRx stock as the company has a highly worthwhile mission to improve the U.S. health care system.
Just as importantly, GoodRx has been consistently profitable. Therefore, it’s not only an honorable company, but a business-savvy one as well.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.