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GoodRX (GDRX) filed their S-1 earlier this week. I read It so you don’t have to (but you should). Here’s a thread on what I found interesting, fascinating and down-right incredible from the company. I’m starting at zero. Follow along here.
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One of the most important KPI’s to measure for GDRX is Monthly Active Users (MAU).
GDRX’s MAU trend is absolutely incredible:
– 2016: 718k
– 2017: 1.28M
– 2018: 2.02M
– 2019: 3.18M
– 2020: 4.88M
Where Will Future Growth Come From?
GDRX outlines 3 ways to grow revs outside Rx codes:
– Subscription offerings: Gold, Kroger Savings
– Pharma Manufacturing Solutions: Provide low-cost solutions to expensive brand-name meds
– Telehealth: Online visits / marketplace
Recap: How To Track GDRX Bull Thesis
– Monitor MAU growth & Repeat Activity
– Size + Strength of Healthcare Partner Network
– Growth of Platform & Telehealth
Meet The Founders (Letter Analysis)
– Making healthcare easy is *crazy* hard
– Consumers (insured or not) needed tools to help
– Reduce cost of nearly every generic drug by >70%
– Prices are less than typical insurance
Thinking About GDRX Valuation
At the current estimated IPO price and shares, GDRX will trade roughly:
– 25x 2019 Revenues
– 62x 2019 EBITDA
– 119x 2019 Pre-tax Profits
They’re also growing 57% compounded since 2016.
GoodRX (GDRX) filed their S-1 earlier this week. I read It so you don’t have to (but you should). Here’s a thread on what I found interesting, fascinating and down-right incredible from the company. I’m starting at zero. Follow along here.
GDRX Facts & Figures
#1 most downloaded medical app
4.9M Monthly Active Users
80%+ Repeat Activity
$20B+ in Consumer Savings
150B daily pricing data points
4 platform offerings
Est. Market Cap: ~$9.9B
Business Overview
Mission: To help Americans get the healthcare they need at a price they can afford.
So far it’s working (really) well.
The company estimates 18M of their customers could NOT have afforded to fill their Rx without the company’s savings tools.
How GoodRX Makes Money
Receives fees from partners, which is mostly Pharmacy Benefit Managers (PBMs) when customer uses GDRX code.
Fees are % of fees that partners earn OR a fixed payment per transaction.
Recurring nature to GDRX model as code is saved to consumer profile.
Financial Results
GMV via prescription offering: $2.5B
Compounded annual revenue growth rate: 57% since 2016
Generated $388M Revenue in 2019
Generated $66M Net Income in 2019
2019 Adj. EBITDA: $160M
Solving Healthcare Consumer Issues
GoodRX notes 5 major healthcare consumer “lacks” in its S-1:
Lack of Consumer-focused solutions
Lack of Affordability
Lack of Transparency
Lack of Access to Care
Lack of Resources for Healthcare pros
GDRX Total Addressable Market
GoodRX estimates their TAM around $800B. That’s a HUGE number.
Here’s how it breaks down:
$524B Prescription Care
$30B Pharma manufacturer solutions
$250B Telehealth
Initial Surprises: Telehealth is nearly 32% of TAM
One of the most important KPI’s to measure for GDRX is Monthly Active Users (MAU).
GDRX’s MAU trend is absolutely incredible:
– 2016: 718k
– 2017: 1.28M
– 2018: 2.02M
– 2019: 3.18M
– 2020: 4.88M
Where Will Future Growth Come From?
GDRX outlines 3 ways to grow revs outside Rx codes:
– Subscription offerings: Gold, Kroger Savings
– Pharma Manufacturing Solutions: Provide low-cost solutions to expensive brand-name meds
– Telehealth: Online visits / marketplace
Recap: How To Track GDRX Bull Thesis
– Monitor MAU growth & Repeat Activity
– Size + Strength of Healthcare Partner Network
– Growth of Platform & Telehealth
Meet The Founders (Letter Analysis)
– Making healthcare easy is *crazy* hard
– Consumers (insured or not) needed tools to help
– Reduce cost of nearly every generic drug by >70%
– Prices are less than typical insurance
Thinking About GDRX Valuation
At the current estimated IPO price and shares, GDRX will trade roughly:
– 25x 2019 Revenues
– 62x 2019 EBITDA
– 119x 2019 Pre-tax Profits
They’re also growing 57% compounded since 2016.
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