Shares of GoodRx Holdings (NASDAQ:GDRX) fell 10.7% through the first half of 2021, according to data from S&P Global Market Intelligence. The stock had been up as much as 40% year to date in February before a broad sell-off in technology stocks. It continued to trend down as Amazon (NASDAQ:AMZN) introduced new features to its online pharmacy and GoodRx user growth slowed considerably.
Amazon launched its online pharmacy in the U.S. late last year. In May, it released two price-comparison features that take direct aim at GoodRx. The first allows members of the company’s Prime service to search for drug prices at Amazon along with 60,000 other pharmacies. The second helps users figure out how much they will have to pay for a drug based on their insurance co-pay. Both tools help Amazon keep the pharmacy orders of Prime members in-house more often.
What might concern Wall Street even more is the deceleration in growth of monthly active consumers (MAUs). In 2019, GoodRx averaged 58% year-over-year growth in MAUs for the four quarters. In 2020, that slowed to 35%. Investors who were eager to get a read on normalized growth coming out of the pandemic weren’t happy with what they saw. Management reported year-over-year MAUs grew just 17% in the first quarter of 2021. It was just 1% compared to the final quarter of 2020. That translated to only 20% revenue growth compared to 42% in 2020.
The user number will be on investors’ radar when the company reports earnings in mid-August. Management has called for 41% revenue growth in the second quarter as it expects to return to last year’s pace.
The company acquired HealthiNation, a healthcare consumer-education platform, in April and price comparator RxSaver in May. It is counting on these, as well as services like telehealth and partnerships with pharmaceutical companies, to reaccelerate growth. What management has to say in a few weeks will likely determine whether the stock price can recapture its February highs before the end of 2021.
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