GoodRx Holdings, Inc. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Shareholders of GoodRx Holdings, Inc. (NASDAQ:GDRX) will be pleased this week, given that the stock price is up 18% to US$37.08 following its latest second-quarter results. Revenues were US$177m, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$0.07, an impressive 408% ahead of estimates. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on GoodRx Holdings after the latest results.

Check out our latest analysis for GoodRx Holdings

Following the latest results, GoodRx Holdings' 13 analysts are now forecasting revenues of US$749.7m in 2021. This would be a notable 19% improvement in sales compared to the last 12 months. GoodRx Holdings is also expected to turn profitable, with statutory earnings of US$0.14 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$749.9m and earnings per share (EPS) of US$0.10 in 2021. Although the revenue estimates have not really changed, we can see there's been a massive increase in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.

The consensus price target was unchanged at US$41.86, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic GoodRx Holdings analyst has a price target of US$56.00 per share, while the most pessimistic values it at US$28.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting GoodRx Holdings' growth to accelerate, with the forecast 41% annualised growth to the end of 2021 ranking favourably alongside historical growth of 34% per annum over the past year. Compare this with other companies in the same industry, which are forecast to grow their revenue 17% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that GoodRx Holdings is expected to grow much faster than its industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards GoodRx Holdings following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target held steady at US$41.86, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for GoodRx Holdings going out to 2023, and you can see them free on our platform here..

You can also see our analysis of GoodRx Holdings' Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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