Digital Healthcare And Pharmacy Networks Will Unlock Market Potential

Key Takeaways

• Expanded pharmacy partnerships, digital integration, and technology investment are driving stronger platform engagement, deeper ecosystem influence, and higher earnings resilience.
  
• Brand trust and network breadth help offset near-term retail disruptions, supporting revenue stability and sustained margin durability despite industry headwinds.
  
• Regulatory uncertainty, partner concentration, increased competition, stagnant user growth, and unproven revenue diversification threaten GoodRx’s long-term profitability and market position.

Catalysts

Offers information and tools that enable consumers to compare prices and save on their prescription drug purchases in the United States.

• The increasing aging population and ongoing rise in drug prices in the U.S. are expanding the addressable market for GoodRx, as more consumers seek cost-saving solutions for prescription medications; this supports sustained long-term growth in revenue.
  
• Growing consumer preference for price transparency and digital-first healthcare engagement is driving higher demand for platforms like GoodRx, and the company’s expanded e-commerce and integrated digital partnerships with pharmacies are likely to boost engagement, user retention, and transaction volumes, positively impacting revenue and earnings.
  
• GoodRx is diversifying and deepening relationships across the pharmacy ecosystem—including expanding pharma manufacturer partnerships, new point-of-sale cash programs, and strengthened PBM collaborations—which positions the company as an indispensable channel and is likely to drive higher ARPU and improved net margins.
  
• The advancement of technology-led initiatives—such as investments in data analytics and targeted marketing, as well as embedding GoodRx directly into pharmacy operations—are expected to create durable, efficient partnerships and incremental earnings growth by increasing platform stickiness and operational leverage.
  
• Despite macroeconomic and retail disruptions (e.g., store closures, Rite Aid bankruptcy), GoodRx’s strengthened brand trust, increased consumer contactability, and established retail and pharmacy partner network are expected to mitigate near-term risks, help recapture prescription volumes, and contribute to revenue stability and margin durability over time.

GoodRx Holdings Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming GoodRx Holdings's revenue will grow by 5.7% annually over the next 3 years.
• Analysts assume that profit margins will increase from 3.6% today to 12.0% in 3 years time.
• Analysts expect earnings to reach $112.6 million (and earnings per share of $0.28) by about May 2028, up from $28.5 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $174.6 million in earnings, and the most bearish expecting $83.8 million.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 22.7x on those 2028 earnings, down from 53.3x today. This future PE is lower than the current PE for the US Healthcare Services industry at 54.4x.
• Analysts expect the number of shares outstanding to decline by 5.87% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 8.11%, as per the Simply Wall St company report.

GoodRx Holdings Future Earnings Per Share Growth

Risks

• Regulatory and policy changes, including increased government intervention on drug price transparency and potential reforms, pose uncertainty and could diminish GoodRx’s core value proposition to consumers, risking long-term revenue and transaction volume.
  
• Growing dependence on close partnerships with retail pharmacies and PBMs—especially as the company pivots to deeper integrated solutions and retail contracting—may expose GoodRx to revenue concentration risk; unfavorable contract renegotiations or industry consolidation could compress margins and destabilize predictable earnings.
  
• Rising competition from direct-to-consumer drug pricing models, such as Amazon Pharmacy and Mark Cuban Cost Plus Drug Company, as well as pharmacy chains developing their own discount or e-commerce solutions, threatens GoodRx’s ability to sustain or grow market share, putting long-term revenue and user base growth at risk.
  
• Active user growth is stagnating, with management acknowledging persistent headwinds and a need to rebalance between pharmacy partner economics and consumer affordability; ongoing pressure on monthly active consumers (MACs) may limit GoodRx’s ability to grow top-line revenue and achieve desired economies of scale.
  
• GoodRx’s efforts to diversify revenue streams beyond core prescription discounts—such as telehealth, pharma manufacturer solutions, and HCP engagement—have not yet demonstrated proven scalability or margin expansion; failure to successfully execute these supplementary initiatives could result in flat or declining net margins and earnings over the long term.

Valuation

• The analysts have a consensus price target of $6.35 for GoodRx Holdings based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $9.0, and the most bearish reporting a price target of just $4.0.
  
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $941.8 million, earnings will come to $112.6 million, and it would be trading on a PE ratio of 22.7x, assuming you use a discount rate of 8.1%.
  
• Given the current share price of $3.95, the analyst price target of $6.35 is 37.8% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.