BofA Lowers GoodRx Target, Flags Ongoing Uncertainty in Pharmacy Ecosystem

Core Viewpoint - BofA Securities has lowered its price target for GoodRx Holdings to $2.60 from $3.00 while maintaining an Underperform rating due to ongoing uncertainty regarding the company's near-term growth outlook [1] Group 1: Market Conditions - Changes in the pharmacy ecosystem are expected to create additional headwinds for GoodRx through 2026, with retail pharmacy chains like CVS, Rite Aid, and Walgreens closing locations [2] - Reimbursement changes in the pharmacy market are anticipated to negatively impact GoodRx's core prescription transaction business in 2025 [2] - Recent shifts in pharmacy benefit manager contracts with plan sponsors may accelerate net pricing at the pharmacy counter, adding further uncertainty to GoodRx's primary revenue stream [2] Group 2: Company Developments - GoodRx has made progress in diversifying its revenue base over the past year, including launching new subscription offerings for erectile dysfunction, hair loss, and weight loss, as well as expanding partnerships with pharmaceutical manufacturers [3] - Despite these efforts, the majority of GoodRx's business remains tied to pharmacy benefit managers (PBMs), indicating a need for the company to strengthen its industry positioning to stabilize growth in 2026 and beyond [3] Group 3: Valuation and Rating - BofA reiterated its Underperform rating and reduced its price objective to $2.60, reflecting a valuation of 4.0x calendar-year 2026 EBITDA, down from 4.5x previously, aligning with lower peer multiples [4]