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Shares of GoodRx Holdings (NASDAQ:) are down greater than 40% in premarket buying and selling Tuesday after the corporate withdrew its FY 2022 outlook.
GoodRx adjusted EPS of 10c, beating the consensus estimates of 8c per share. Whole income within the first quarter got here in at $203.3 million, up 27% YoY and above the analyst expectations of $200.4 million.
For Q2, GDRX expects $190 million in income, properly under the consensus estimates of $216.1 million. The corporate stated it won’t present FY steering presently.
GoodRx additionally stated it noticed a serious grocery chain take steps that affected the acceptance of reductions from most pharmacy profit managers (PBMs) for a subset of medication. The difficulty left a direct influence on the corporate’s shoppers as the vast majority of reductions on GoodRx merchandise are offered by PBMs.
In consequence, GoodRx noticed a pointy decline in quantity and expects a good stronger influence on its Q2 and FY efficiency.
A minimum of 4 analysts downgraded GDRX inventory after earnings. Evercore ISI analyst Mark Mahaney moved to In Line from Outperform with a $12.00 per share worth goal, down from $28.00.
“Whereas [the PBMs] determination might get reversed, the income focus threat was a destructive shock to us and adopted final quarter’s warning that depressed new prescription begins would negatively influence GDRX’s Prescription Transaction Income phase (75%+ of income). All in, we now have considerably much less visibility into – and confidence in — GDRX’s topline traits,” Mahaney stated in a shopper word.
Raymond (NS:) James analyst John Ransom additionally downgraded to Market Carry out from Outperform, citing the identical cause. Whereas GDRX didn’t point out which grocer stopped accepting GoodRx discounting playing cards, Ransom stated that checks present it’s Kroger (NYSE:).
“One PBM tells us that Kroger is directing visitors away from the GDRX low cost card to different low cost applications, together with its personal card. We’ve got heard a number of theories as to why Kroger is taking this plan of action, however have to do extra legwork to verify. At any charge, we predict the chance that KR stays out of GDRX’s community is actual. Whereas the corporate might, certainly have the ability to hold its retail community intact and offset some harm, we predict that the PTR buyer base is smaller than it in any other case would have been, possibly completely and that the inventory will stay within the penalty field till visibility improves,” Ransom wrote to purchasers.
By Senad Karaahmetovic
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