Download now: The Downfall of Cable, and the Rise of 5G!

GoodRx Sets IPO for Wednesday

Written by Monica Savaglia
Posted September 22, 2020

It was a few weeks ago that I wrote about GoodRx and its expected IPO. Well, the time has come: The company expects to go public on Wednesday, September 23.

GoodRx’s IPO is set to be the biggest deal of the week. It plans to raise $900 million with an $11.2 billion market capitalization. It will be listed on the Nasdaq under the ticker symbol “GDRX.” As I write this, the expected IPO price range is $24 to $28 per share. Of course, that range could easily change depending on GoodRx and its underwriters. 

GoodRx operates in the prescription drug market. It gives customers access to discounts and allows them to easily compare drug prices on GoodRx’s mobile app and website. The company is based in California and was founded back in 2011 by Trevor Bezdek, Dough Hirsch, and Scott Marlette. Over the years, the company has been able to form many partnerships with major prescription drug companies throughout the U.S., allowing it to lower prescription drug costs. 

Last September, GoodRx decided to expand its business in the growing industry of telehealth. It acquired the telemedicine company HeyDoctor in September 2019 and rebranded HeyDoctor’s platform into GoodRx Care. This telemedicine platform lets people consult a board-certified doctor online and get prescriptions for certain types of medicines for $20 with no insurance required. 

This acquisition came at the perfect time for GoodRx. The COVID-19 pandemic left millions of people at home for months without any access to a doctor (in the traditional sense). Telemedicine was some people's only option, and some of them chose GoodRx Care because it was cheap and accessible for those without health insurance. Not only that, if a person needed medicine, they could get it at the cheapest price. 

According to GoodRx, which tracks the prices consumers pay at pharmacies, pharmaceutical companies had logged more than 800 price increases in 2020 during the pandemic — increasing 42 medicines by an average of 3.3% as of July. You might be shocked to read that during a time of major hardship for some people, the medicines they depend on had increased in price. No one should have to wonder if they'll be able to get the care or medicine that they need; it is a necessity for maintaining a healthy life. GoodRx understands this, with its affordable prices for drugs along and easy, inexpensive access to telemedicine.

GoodRx's prospectus states that it has been profitable since 2013. Its business model is working, and its app is one of the most downloaded medical apps. The company provides a service that’s extremely appealing. Medicine and health care are expensive, and everyone is looking for a deal when it comes to paying for those things, so it’s no surprise that a platform that helps customers get the cheapest prescriptions and other medical services continues to be profitable. 

The company aims to disrupt the pharmaceutical and telehealth industries by giving customers options and allowing them to price compare pharmaceuticals like any other item you bargain shop for. In a financial round back in August 2018, the company was valued at around $2.8 billion. However, that was two years ago, and that valuation has most likely changed. (It’ll definitely change this Wednesday!) GoodRx’s IPO appears to have some of the best financials of any company that's gone public this year.

According to GoodRx’s prospectus, it recorded a net profit of $85 million in the first half of 2020, up from $66 million during the same period last year. It looks like the company has been able to keep technological and general expenses steady, which allows for more funds to be allocated towards sales and marketing — that's especially important right before a company goes public. And it appears that this marketing push has helped the company by increasing revenue by 48% from 2019 to 2020. Looking at the financials provided in its S-1, it appears GoodRx is a strong position for growth and continued profitability.

However, it's important to note that the company is so successful because of the cracks in America’s health care system, and the company has taken advantage of how that system disadvantages the American people. If there was a push for more affordable prices and health care or even health care for all, that could disrupt GoodRx’s business model. But as long as the current system is in place, GoodRx will continue to thrive and meet the needs of its customers. 

If all goes well, the company will go public tomorrow, September 23, and could become one of the best IPOs of this year. You don’t want to miss out!

If you’d like to receive more information about GoodRx’s potential IPO and other similar IPOs, click here.

Until next time,

Monica Savaglia Signature Park Avenue Digest

Monica Savaglia

Monica Savaglia is Wealth Daily’s IPO specialist. With passion and knowledge, she wants to open up the world of IPOs and their long-term potential to everyday investors. She does this through her newsletter IPO Authority, a one-stop resource for everything IPO. She also contributes regularly to the Wealth Daily e-letter. To learn more about Monica, click here.

Buffett's Envy: 50% Annual Returns, Guaranteed