Unheard gross margins of 95% and a $800B TAM : $GDRX

16 ott 2020

GoodRx is a free-to-use service that allows Americans to find the lowest-cost prescription drugs in their area. The company makes money by receiving a commission for every prescription order filled via its coupons, which are accepted by nearly all 70,000 pharmacies across the country.

-Most Downloaded medical app in US with 4.8/5 rating(700,000+ reviews)
-Partnership with Kroger
-Competing with TDOC with the launch of HeyDoctor
- Rising prices of pharmaceuticals and their mission is to lower the cost of healthcare
-95% Gross margin (What?!?!). 30% Operating margin.
- 75M Free cash flow.
- TAM $800 Mn
- NPS 86
- 4.6/5 Glassdoor
- Founder led

Concerns,
1. P/S of 37.1 and 201 PE. Average PE in healthcare is 24.
2. IPO hype(good for trades though)
3. 94% of top line revenue still coming in from prescription stream(concentration risk?) which grew 42% Q1.
4. Regulations
5. International expansion?
6. 4 holders own 60-65% of the company(Both good and bad)

TA,
1. Wedge breakout
2. Potential base of Cup.
3. Low volume on Pullback

Not a long term position yet. Swing trade.
Entry : break of 52
Stop loss : 49 (-7.8%)