Core Insights - The healthcare sector is undergoing digital transformation, with investors focusing on platforms that enhance access, reduce costs, and improve pharmaceutical engagement [1] - OptimizeRx (OPRX) and GoodRx (GDRX) are highlighted as key players, each with unique strategies to enhance patient outcomes and affordability [1] OptimizeRx Overview - OptimizeRx integrates pharma and provider communications, offering real-time digital messaging within electronic health records (EHRs) to support medication adherence and clinical decision-making [2] - In Q1 2025, OptimizeRx reported revenues of $21.9 million, an 11% increase year-over-year, exceeding expectations [4] - The company has over $70 million in committed revenue for the year, a 25% increase from Q1 2024, providing over 80% revenue visibility for the latter half of 2025 [5] - A transition to a subscription-based model is underway, expected to represent over 5% of projected 2025 revenues, enhancing revenue predictability and gross margins [6] - OptimizeRx is focusing on its Digital Audience Activation Platform (DAAP) and micro-targeted data capabilities, which could unlock new upsell opportunities within its top clients [7] - The company reports a high return on investment (10:1) and aims to sustain revenue momentum while expanding market share [8] GoodRx Overview - GoodRx targets consumers directly, helping them save on prescription drugs through price transparency and discount programs [2] - In Q1 2025, GoodRx's revenues reached $202.9 million, a 2.6% year-over-year increase, with adjusted EBITDA up 11% to $69.8 million [9] - Despite a decline in monthly active consumers (MACs), GoodRx experienced a 7% increase in revenue per MAC, driven by a favorable shift towards higher-margin prescription fills [10][11] - Future growth initiatives include scaling its e-commerce platform, expanding point-of-sale discount programs, and integrating non-covered drug prices into PBM plans [12][13] - GoodRx has $301 million in cash and a strong partner network, positioning it well to navigate macro uncertainties [14] Comparative Analysis - Year-to-date, OPRX shares have increased by 166.8%, while GDRX shares have only grown by 2.1% [15] - In terms of valuation, OptimizeRx trades at 2.16X forward Price/Sales, compared to GoodRx's 2.02X, with OptimizeRx holding a Value Score of D and GoodRx a Value Score of B [18] - Earnings estimates for 2025 show OPRX at 54 cents per share (63.6% increase) and GDRX at 38 cents per share (11.8% increase) [22] - OptimizeRx is gaining momentum through its subscription model and data-driven solutions, while GoodRx remains a strong consumer brand with retail and pharma integrations [23]

Core Insights - The article compares GoodRx Holdings, Inc. (GDRX) and HealthEquity (HQY) to determine which stock is more attractive to value investors [1] - GDRX has a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, while HQY has a Zacks Rank of 3 (Hold) [3] Valuation Metrics - GDRX has a forward P/E ratio of 12.80, significantly lower than HQY's forward P/E of 27.57 [5] - The PEG ratio for GDRX is 1.15, while HQY's PEG ratio is 1.32, suggesting GDRX is more favorably valued considering expected earnings growth [5] - GDRX's P/B ratio is 2.64 compared to HQY's P/B of 4.2, further indicating GDRX's relative undervaluation [6] Value Grades - GDRX has earned a Value grade of B, while HQY has a Value grade of D, highlighting GDRX's superior valuation metrics [6] - The combination of solid earnings outlook and favorable valuation figures positions GDRX as the better value option currently [6]

Core Insights - The article emphasizes a holistic investment approach in healthcare equities, integrating both top-down and bottom-up valuation techniques [1] Group 1 - The importance of detailed analysis of companies, including capital structure and debt covenants, is highlighted as a significant factor in equity valuation [1]

Group 1 - The stock market has been recovering from losses incurred due to Trump's tariffs, but there is an expectation that dispersion among stocks will increase, particularly among large-cap stocks that have dominated the market [1] - Gary Alexander has extensive experience in covering technology companies and has been involved with seed-round startups, providing insights into current industry trends [1] Group 2 - The article does not provide specific financial data or performance metrics related to any companies or sectors [2][3]

Group 1 - JP Morgan analyst Lisa C. Gill revised her 2025 outlook on GoodRx Holdings (GDRX) following the company's first-quarter earnings, reaffirming an Overweight rating and maintaining a $7 price forecast [1][6] - GoodRx reported first-quarter 2025 revenue of $203 million, exceeding the estimate of $202.21 million, representing a 3% year-over-year increase. Adjusted EBITDA rose to $69.8 million, with margins improving to 34.4% from 31.7%. Net income was $11.1 million, reversing a $1 million loss from the previous year [1] - The company reaffirmed its full-year 2025 revenue outlook of $810-$840 million and raised its adjusted EBITDA forecast to $273–$287 million, compared to $260.2 million in 2024 [3] Group 2 - Pharma Manufacturer Solutions' revenue climbed 17%, while subscription revenue declined 7%, primarily due to the phaseout of the Kroger Savings Club [2] - Gill slightly revised her 2025 revenue estimate downward to $817 million, citing approximately $5 million in Rite Aid headwinds, offset by strength in Pharma Manufacturer Solutions and improved margins. Adjusted EBITDA projection was increased to $279 million, reflecting 7% growth and a 135 basis-point margin expansion to 34.2% [4] - The trend of pharmacy costs shifting to consumers and efforts by pharmacies/PBMs to capture abandoned scripts create a favorable environment for GoodRx's value proposition, with anticipated solid growth and margin expansion due to ISP adoption and increased consumerism in healthcare [5]

Industry Overview - Health and fitness companies focus on improving physical well-being through products and services such as gym memberships, fitness equipment, nutritional supplements, and wellness programs [1] - The industry benefits from consistent demand driven by growing global awareness of health issues and the importance of physical fitness, supported by rising rates of lifestyle-related diseases and a growing emphasis on preventive healthcare [3] - Diverse revenue streams, including subscriptions, product sales, and services, make the health and fitness sector attractive to investors seeking long-term gains [4] Investment Opportunities - Five recommended stocks in the health and fitness space with favorable Zacks Rank include Sprouts Farmers Market Inc. (SFM), DexCom Inc. (DXCM), Hims & Hers Health Inc. (HIMS), United Natural Foods Inc. (UNFI), and GoodRx Holdings Inc. (GDRX) [2] Company Highlights Sprouts Farmers Market Inc. (SFM) - Focus on product innovation, e-commerce, private label offerings, and targeted marketing has led to better-than-expected fourth-quarter 2024 results, with both top and bottom lines growing year over year [6] - Expected net sales growth of 10.5% to 12.5% and comparable store sales increase of 4.5% to 6.5% for 2025 [7] - Projected revenue and earnings growth rates of 13.7% and 33.6%, respectively, for the current year [8] DexCom Inc. (DXCM) - Benefiting from strong contributions from the Sensor segment and both domestic and international revenue growth [10] - Expected revenue and earnings growth rates of 14.3% and 23.2%, respectively, for the current year [11] Hims & Hers Health Inc. (HIMS) - Addresses a $360 million U.S. total addressable market across various healthcare specialties, with over 2 million subscribers driving recurring revenues [12] - Expected revenue and earnings growth rates of 58.5% and more than 100%, respectively, for the current year [13] United Natural Foods Inc. (UNFI) - Demonstrating strong growth supported by wholesale momentum and demand for natural and organic products [14] - Expected revenue and earnings growth rates of 1.9% and more than 100%, respectively, for the current year [16] GoodRx Holdings Inc. (GDRX) - Offers a price comparison platform for prescription drugs, enabling consumers to save on purchases [17] - Expected revenue and earnings growth rates of 4% and 14.7%, respectively, for the current year [19]

Core Viewpoint - Investors in the Medical Services sector may find GoodRx Holdings, Inc. (GDRX) and Progyny (PGNY) as potential stocks to consider, with GDRX appearing more attractive for value investors [1] Valuation Metrics - GoodRx Holdings, Inc. has a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, while Progyny has a Zacks Rank of 4 (Sell) [3] - GDRX has a forward P/E ratio of 9.59, significantly lower than PGNY's forward P/E of 14.46, suggesting GDRX may be undervalued [5] - The PEG ratio for GDRX is 0.86, compared to PGNY's PEG ratio of 0.94, indicating GDRX's expected earnings growth is more favorable [5] - GDRX's P/B ratio is 2, while PGNY's P/B ratio is 4.73, further supporting GDRX's valuation as more attractive [6] - GDRX's overall Value grade is A, while PGNY's Value grade is C, highlighting GDRX's stronger position in terms of value metrics [6] Earnings Outlook - GDRX is noted for its improving earnings outlook, which enhances its attractiveness in the Zacks Rank model [7]

Core Insights - The article emphasizes the importance of earnings estimates and revisions in identifying strong stocks, while also acknowledging that investors have their own strategies, including value, growth, and momentum trends [1] Value Investing - Value investing focuses on identifying companies that are undervalued by the market, utilizing various valuation metrics to find these stocks [2] Style Scores System - Zacks has created the Style Scores system to highlight stocks with specific traits, where value investors are particularly interested in stocks with high grades in the "Value" category, especially those with a high Zacks Rank [3] GoodRx (GDRX) Overview - GoodRx (GDRX) currently holds a Zacks Rank of 2 (Buy) and a Value grade of A, with a Forward P/E ratio of 10.11, significantly lower than the industry average of 14.40 [4] - Over the past 52 weeks, GDRX's Forward P/E has fluctuated between a high of 22.35 and a low of 9.65, with a median of 14.79 [4] PEG Ratio - GDRX has a PEG ratio of 0.91, which is lower than the industry's average PEG of 1.03, indicating potential undervaluation [5] - The PEG ratio for GDRX has ranged from a high of 2.37 to a low of 0.87 over the last 12 months, with a median of 1.18 [5] Investment Outlook - The metrics suggest that GoodRx is likely undervalued at present, combined with a strong earnings outlook, making it an attractive value stock [6]

Financial Data and Key Metrics Changes - Total revenue for the first quarter of 2025 was $203 million, representing a 3% increase compared to the prior year [26] - Adjusted EBITDA was $69.8 million, an 11% increase year-over-year, with an adjusted EBITDA margin of 34.4%, improving by 60 basis points from the previous quarter [26] - The company ended the quarter with $301 million in cash and $91.7 million of unused capacity on its revolving line of credit, resulting in total liquidity of $392.7 million [27] Business Line Data and Key Metrics Changes - Prescription transaction revenue increased by 217% year-over-year [26] - The integrated savings program (ISP) saw a decline in monthly active consumers (MACs) due to some price increases, but the company maintained its leadership position in the prescription affordability segment, with a segment share increase of over 300 basis points year-over-year in the first two months of the quarter [16][26] Market Data and Key Metrics Changes - Over 12 million consumers and over 750,000 healthcare professionals (HCPs) used GoodRx in the first quarter, indicating strong platform engagement [10] - The company acknowledged ongoing uncertainty in the macroeconomic environment, including regulatory changes and consumer sentiment shifts, which could impact business [12] Company Strategy and Development Direction - The company is focused on high-impact initiatives to strengthen its position in the pharmacy ecosystem, including enhancing partnerships with retail pharmacies and expanding its e-commerce capabilities [8][10] - GoodRx aims to serve as a digital front door for retail pharmacy partners, facilitating tighter partnerships and improving workflows [35] - The company is also investing in its brand to ensure it remains the primary choice for medication access and affordability [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the complexities of the prescription medication landscape and emphasized the importance of partnerships with pharmacies and manufacturers [10][12] - The company is aware of the potential impact of Rite Aid's bankruptcy on its business but believes it is well-positioned to manage the transition of prescriptions to other pharmacies [29][46] Other Important Information - GoodRx was recognized as one of Newsweek and USA Today's 2025 most trusted brands, reinforcing its value proposition to consumers [14] - The company is actively engaging with pharmacy partners to ensure smooth transitions for patients affected by retail closures [13] Q&A Session Summary Question: What are the most important high-impact initiatives for the company? - Management highlighted closer partnerships with retail pharmacies and expanding brand partnerships as key initiatives to drive growth [35] Question: How does the company plan to manage the impact of Rite Aid's bankruptcy? - Management stated that they are in discussions with retail partners to ensure a smooth transition for affected prescriptions and emphasized that the impact on revenue is expected to be less than 5% [29][46] Question: What is the company's perspective on the shift to cost-plus pricing by larger PBMs? - Management indicated that a significant portion of their business already operates on cost-plus pricing and that this shift does not significantly impact their cash prescription opportunities [54] Question: Is there still an opportunity with GLP medications? - Management confirmed that opportunities with GLP medications remain and that they are in discussions with manufacturers to embed their programs on the GoodRx platform [58][60] Question: How does the company view its capital allocation strategy? - Management stated that they will continue to invest in the business while also prioritizing stock repurchases due to the undervalued stock price [87] Question: What is the company's exposure to Medicare beneficiaries? - Management noted that less than 30% of users are Medicare eligible, and only 2-3% hit their maximum out-of-pocket, indicating limited impact from changes in Medicare policies [94][96]

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $203 million, reflecting a 3% increase year-over-year [25] - Prescription transaction revenue and manufacturer solutions revenue increased by 217% year-over-year [25] - Adjusted EBITDA for Q1 2025 was $69.8 million, an 11% increase year-over-year, with an adjusted EBITDA margin of 34.4% [25] Business Line Data and Key Metrics Changes - The prescription marketplace and manufacturer solutions offerings saw significant growth, with a focus on enhancing partnerships with pharmacies and pharmaceutical manufacturers [10][18] - The integrated savings program (ISP) is being evaluated for expansion into non-covered medications, indicating a strategic shift to enhance value [17] Market Data and Key Metrics Changes - Over 12 million consumers and 750,000 healthcare professionals (HCPs) utilized GoodRx in Q1 2025, demonstrating strong platform engagement [9] - The company noted ongoing uncertainty in the macroeconomic environment, including regulatory changes and consumer sentiment shifts, which could impact business [11] Company Strategy and Development Direction - The company is focused on high-impact initiatives to strengthen its position in the pharmacy ecosystem, including leadership changes and strategic partnerships [5][6] - GoodRx aims to enhance its e-commerce capabilities and integrate more deeply with pharmacy operations to improve consumer experience and pharmacy profitability [16][21] - The company is committed to investing in its brand and expanding its value proposition to consumers and HCPs [13][22] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by the Rite Aid bankruptcy and emphasized the importance of maintaining relationships with pharmacy partners to ensure smooth transitions for consumers [11][12] - The company remains optimistic about its future growth opportunities, particularly in expanding its partnerships and enhancing its service offerings [20][22] Other Important Information - The company ended Q1 2025 with $301 million in cash and $91.7 million of unused capacity on its revolving line of credit, indicating strong liquidity [25] - A share repurchase program is in place, with approximately $189 million remaining under the $450 million authorization [25] Q&A Session Summary Question: What are the most important high-impact initiatives for the company? - Management highlighted closer partnerships with retail pharmacies and expanding brand partnerships as key initiatives to drive growth [36] Question: How has the company historically managed store closures and consumer retention? - Management indicated that they are actively working to ensure smooth transitions for consumers during pharmacy closures, emphasizing the strength of the GoodRx brand [42][45] Question: What is the impact of the shift to cost-plus pricing by larger PBMs on the company's legacy model? - Management stated that a significant portion of their business already operates on cost-plus pricing, and they remain indifferent to the reimbursement mechanism [54] Question: Is there still an opportunity with GLP medications? - Management confirmed that opportunities with GLP medications continue to exist, and they are in discussions with manufacturers to enhance consumer access [58] Question: How does the company view its exposure to Medicare beneficiaries? - Management noted that less than 30% of users are Medicare eligible, and the impact of changes in Medicare out-of-pocket costs is minimal [93][95] Question: What is the company's strategy regarding biosimilars? - Management expressed optimism about the uptake of biosimilars and their alignment with the company's affordability narrative [97]