Inscription of GoodRx on the outside of Nasdaq on the day of its IPO, September 23, 2020
Source: GoodRx
Shares of the GoodRx prescription service fell 39% to a record low on Tuesday after the company reported weaker-than-expected earnings and issued a disappointing forecast.
GoodRx allows users to search for the cheapest place to find a prescription and gives them a coupon to take to the pharmacy. The company makes money from advertisements on its website and fees for recommended services that hit during the Covid-19 pandemic.
“The reality is that the effects of Covid-19 have lasted longer than we expected, and the impact on our business is greater than expected,” said Trevor Bezdek, co-CEO of GoodRx, during the call for profit. “I want to admit that we underestimated the length of time that Covid-19 will affect our business.
GoodRx reported fourth-quarter revenue of $ 213.3 million, with analysts missing an average estimate of $ 217.5 million, according to FactSet.
The closure of some medical offices and the reluctance of consumers to see a doctor during the pandemic have led to fewer prescriptions and recharges in the last two years, Doug Hirsch, another co-executive director of GoodRx, said in an interview.
“There is this huge gap that we thought we would just fill, but then a lot of people just chose not to come back. [to doctors]”There seems to be this constant gap of users who are not diagnosed and do not receive the treatment they need.”
For investors, the company’s forecast is particularly problematic. GoodRx estimates 23% year-over-year growth of about $ 917 million. According to FactSet, analysts expected $ 963 million.
“We get smarter with each new wave of Covid,” Hirsch said. “I think right now we have two years of understanding literally when the doctor’s office is closed or when the consumer doesn’t leave home.”
GoodRx also offers telehealth services. He bought the startup HeyDoctor in 2019 so that consumers can recharge their medicines and get advice on their prescriptions. And there’s a service called GoodRx Gold that offers a monthly subscription of $ 9.99 for customers who have many prescriptions.
GoodRx went public in September 2020 and took off from the gate, with shares peaking at $ 64.22 this month. With the fall on Tuesday, the shares are now trading at a price lower than $ 16.73, about 50% below the place where they debuted at the IPO. The company’s market value fell to 6.7 billion dollars.
I WATCH: The GoodRx co-CEO is discussing the growth of his subscription business