GoodRx (GDRX)

Healthcare tech company GoodRx (NASDAQ:GDRX) reported Q4 CY2025 results beating Wall Street’s revenue expectations, but sales fell by 1.9% year on year to $194.8 million. On the other hand, the company’s full-year revenue guidance of $765 million at the midpoint came in 6.2% below analysts’ estimates. Its non-GAAP profit of $0.09 per share was in line with analysts’ consensus estimates.

Company Overview

Started in 2011 to tackle the problem of high prescription drug costs in America, GoodRx (NASDAQ:GDRX) operates a digital platform that helps consumers find lower prices on prescription medications through price comparison tools and discount codes.

The consumer-focused healthcare technology sector leverages digital platforms to make healthcare more accessible and affordable, offering services like telemedicine and prescription discounts. Looking forward, growth is supported by increasing consumer comfort with telehealth and the demand for cost-saving tools amidst rising healthcare expenses. AI-powered diagnostics and personalized digital care also present significant opportunities. However, the sector faces headwinds from heightened competition as large technology and established healthcare companies expand their digital presence.

GoodRx competes with other prescription discount providers like SingleCare and RxSaver, pharmacy benefit managers such as CVS Caremark (NYSE:CVS) and Express Scripts (part of Cigna Group, NYSE:CI), and digital healthcare platforms including Amazon Pharmacy (NASDAQ:AMZN) and Mark Cuban Cost Plus Drug Company.

Larger companies benefit from economies of scale, where fixed costs like infrastructure, technology, and administration are spread over a higher volume of goods or services, reducing the cost per unit. Scale can also lead to bargaining power with suppliers, greater brand recognition, and more investment firepower. A virtuous cycle can ensue if a scaled company plays its cards right.

With just $796.9 million in revenue over the past 12 months, GoodRx is a small company in an industry where scale matters. This makes it difficult to build trust with customers because healthcare is heavily regulated, complex, and resource-intensive.

A company’s long-term sales performance is one signal of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Thankfully, GoodRx’s 7.7% annualized revenue growth over the last five years was decent. Its growth was slightly above the average healthcare company and shows its offerings resonate with customers.

Long-term growth is the most important, but within healthcare, a half-decade historical view may miss new innovations or demand cycles. GoodRx’s recent performance shows its demand has slowed as its annualized revenue growth of 2.4% over the last two years was below its five-year trend. We’re wary when companies in the sector see decelerations in revenue growth, as it could signal changing consumer tastes aided by low switching costs.

We can dig further into the company’s revenue dynamics by analyzing its number of customers, which reached 5.3 million in the latest quarter. Over the last two years, GoodRx’s customer base averaged 9.5% year-on-year declines. Because this number is lower than its revenue growth, we can see the average customer spent more money each year on the company’s products and services.

This quarter, GoodRx’s revenue fell by 1.9% year on year to $194.8 million but beat Wall Street’s estimates by 0.8%.

Looking ahead, sell-side analysts expect revenue to grow 2.2% over the next 12 months, similar to its two-year rate. This projection doesn't excite us and implies its newer products and services will not catalyze better top-line performance yet.

Adjusted operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies because it excludes non-recurring expenses, interest on debt, and taxes.

GoodRx has been an efficient company over the last five years. It was one of the more profitable businesses in the healthcare sector, boasting an average adjusted operating margin of 25.1%.

Analyzing the trend in its profitability, GoodRx’s adjusted operating margin decreased by 3.9 percentage points over the last five years, but it rose by 1.8 percentage points on a two-year basis. Still, shareholders will want to see GoodRx become more profitable in the future.

In Q4, GoodRx generated an adjusted operating margin profit margin of 23.3%, down 2.3 percentage points year on year. This contraction shows it was less efficient because its expenses increased relative to its revenue.

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

GoodRx’s flat EPS over the last five years was below its 7.7% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded due to non-fundamental factors such as interest expenses and taxes.

Diving into the nuances of GoodRx’s earnings can give us a better understanding of its performance. As we mentioned earlier, GoodRx’s adjusted operating margin declined by 3.9 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its lower earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

In Q4, GoodRx reported adjusted EPS of $0.09, in line with the same quarter last year. This print slightly missed analysts’ estimates. Over the next 12 months, Wall Street expects GoodRx’s full-year EPS of $0.35 to grow 21.3%.

Although earnings are undoubtedly valuable for assessing company performance, we believe cash is king because you can’t use accounting profits to pay the bills.

GoodRx has shown robust cash profitability, giving it an edge over its competitors and the ability to reinvest or return capital to investors. The company’s free cash flow margin averaged 18.9% over the last five years, quite impressive for a healthcare business.

Taking a step back, we can see that GoodRx’s margin dropped by 11.6 percentage points during that time. If its declines continue, it could signal increasing investment needs and capital intensity.

GoodRx burned through $38.85 million of cash in Q4, equivalent to a negative 19.9% margin. The company’s cash flow turned negative after being positive in the same quarter last year, suggesting its historical struggles have dragged on.

EPS and free cash flow tell us whether a company was profitable while growing its revenue. But was it capital-efficient? A company’s ROIC explains this by showing how much operating profit it makes compared to the money it has raised (debt and equity).

GoodRx’s five-year average ROIC was negative 1.5%, meaning management lost money while trying to expand the business. Investors are likely hoping for a change soon.

We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. GoodRx’s ROIC has increased significantly over the last few years. This is a good sign, and we hope the company can continue improving.

GoodRx reported $261.8 million of cash and $542.8 million of debt on its balance sheet in the most recent quarter. As investors in high-quality companies, we primarily focus on two things: 1) that a company’s debt level isn’t too high and 2) that its interest payments are not excessively burdening the business.

With $270.5 million of EBITDA over the last 12 months, we view GoodRx’s 1.0× net-debt-to-EBITDA ratio as safe. We also see its $14.64 million of annual interest expenses as appropriate. The company’s profits give it plenty of breathing room, allowing it to continue investing in growth initiatives.

It was good to see GoodRx narrowly top analysts’ revenue expectations this quarter. On the other hand, its full-year revenue guidance missed and its full-year EBITDA guidance fell short of Wall Street’s estimates. Overall, this quarter could have been better. The stock traded down 11.8% to $2.18 immediately following the results.

Updated: February 25, 2026 at 5:34 PM EST

When considering an investment in GoodRx, investors should account for its valuation and business qualities as well as what’s happened in the latest quarter.

We see the value of companies making people healthier, but in the case of GoodRx, we’re out. Although its revenue growth was decent over the last five years, it’s expected to deteriorate over the next 12 months and its customer momentum declined. And while the company’s rising returns show management's prior bets are at least better than before, the downside is its subscale operations give it fewer distribution channels than its larger rivals.

GoodRx’s P/E ratio based on the next 12 months is 5.8x. While this valuation is optically cheap, the potential downside is huge given its shaky fundamentals. There are more exciting stocks to buy at the moment.

Wall Street analysts have a consensus one-year price target of $4.56 on the company (compared to the current share price of $2.18).

Although the price target is bullish, readers should exercise caution because analysts tend to be overly optimistic. The firms they work for, often big banks, have relationships with companies that extend into fundraising, M&A advisory, and other rewarding business lines. As a result, they typically hesitate to say bad things for fear they will lose out. We at StockStory do not suffer from such conflicts of interest, so we’ll always tell it like it is.