GDRX trade ideas
GoodRX - Possible bounceNot much history on this stock but with more potential lockdowns telemedicine seems like a buy to me. Testing my luck on this one. We have to at least bounce off support If it reaches $49-50 then we would have a cup and handle and target of $60-65 is possible.
However, nothing on this chart screams BUY to me. Sometimes you have to make dumb decisions to get dumb results.
GoodRX Stock vs Amazon Pharmacy Teaches Genuine LessonGoodRX IPO’ed on September 23, 2020, and GoodRX NASDAQ:GDRX stock had a good performance for an IPO for about 2 months. It was a solid $51.50 per share stock.
Then news broke on November 17th about Amazon Pharmacy. I believe investors didn’t really understand what the Amazon Pharmacy news was actually telling us. More on that in a minute.
GoodRX gapped down over November 17th and 18th losing over a third of its value. Then over the next 10 trading days, as the news started to settled and investors started to understand what Amazon Pharmacy was actually doing, GoodRX stock started to consolidate.
Who is Pill Pack?
In June of 2018, Amazon bought a little-known company called Pill Pack for $750 million. Pill Pack is like an online pharmacy. You or your doctor sends them your prescription and they will send you your medicine right to your doorstep.
That’s what Amazon Pharmacy is all about. Checking their website states just that. The GoodRx co-CEO Doug Hirsch recently said it best that investors’ fear was misguided: The two companies (GoodRX and Amazon) are “complementary,” not competitors.
And we can see that investors are starting to understand that. GoodRX over the past few trading days is up 18% (although they have given back about 3.9% of those gains in the last couple of trading days). And I believe that GoodRX stock is headed back to being a solid $50 stock or greater in the near-term.
GoodRX Stock Lesson Learned?
So what lesson can we learn as investors that want to become better investors?
Well the simplest lesson, is an old one. Take the emotion out of investing. We all do it. We see a stock that we’re holding suddenly gap down and lose value as something that fills us with fear and tells us that we need to cut this stock loose. Just dump it, get rid of it! I don’t want that fear!
But with the GoodRX and Amazon Pharmacy story we can see that once we truly understand what this new data point or information is actually telling us, we can make better decisions as investors.
That’s why it’s important to know the companies you’re investing in. Do your own research, your own due diligence. If the company passes your test, then, by all means, start a position and use charts to find good entry points.
Let’s take a look at Q3 for GoodRX. They posted total revenue of $140.5 million, up 38%. Those numbers beat analyst expectations. GoodRX projects Q4 revenue of about $148 million and fiscal year, or total year, revenue of about $545 million for year-over-year growth of 40%. That also beats the Streets views by $10 million. Not too bad for a companies earnings report debut.
And think about this. If you bought GoodRX when it IPO’ed (GoodRX Stock IPO’ed for $33 per share), not because of any IPO hype, but because you had done your research into the company, your own due diligence, and though, yea, this is a solid company with a bright future and held on to it through its losses, you’d be right back where you started and up a few bucks per share. Not much gained, but nothing lost. However, that fear, that nasty feeling of fear, would have never gotten you down.
GoodRX Q3 Earnings Report Upbeat
Let’s take a look at Q3 for GoodRX. They posted total revenue of $140.5 million, up 38%. Those numbers beat analyst expectations. GoodRX projects Q4 revenue of about $148 million and fiscal year, or total year, revenue of about $545 million for year-over-year growth of 40%. That also beats the Streets views by $10 million. Not too bad for a companies earnings report debut.
And think about this. If you bought GoodRX when it IPO’ed (GoodRX Stock IPO’ed for $33 per share), not because of any IPO hype, but because you had done your research into the company, your own due diligence, and though, yea, this is a solid company with a bright future and held on to it through its losses and the little bounceback, you’d be right back where you started (up a few bucks per share thought). Not much gained, but nothing lost. However, that fear, that nasty feeling of fear, would have never gotten you down.
GoodRX Stock Going Forward
Looking at GoodRX going forward we can see the value this company has, now and in the future. Let me know in the comments: Do you believe in the GoodRX story? Do you think GoodRX is a solid company? And would $40 to $45 make good entry points? I think the answer is a solid yes!
$GDRX somehow it worked wellI was able to catch this guy at the bottom, this doesn't happen usually.
Unheard gross margins of 95% and a $800B TAM : $GDRXGoodRx 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%)
Daily Equilibrium shaping up hereLooking to see if the end of day bull action continues into tomorrow to break today's highs and establish a new higher low as we continue to tighten on the daily chart
GDRX: Buy at $64.32 Profit at $80.40Have you ever wanted to compare prices to get the cheapest drug prices? Well look no more and take a look at Goodrx. This is a software platform the helps find disocunted prices for prescription drugs. Overall it look pretty good that it compares major retailers like Costco, Walmart, CVS and more. This IPO only a few week ago on 09/23/2020 and this constitutes looking for an IPO base. To find more about IPO bases look here:
The technical set is going well with no undercut of the initial IPO day price and has made a sideway correction of at least 5 days. Today on 10/01/2020 volume has dried up even more, which makes this more constructive. The base depth is a bit concerning.
Fundamentals are great with sales and EPS below
Quarterly Sales
Sep19: +63%
Dec19: +82%
Mar20: +63%
Jun20: +35%
Yearly EPS
2016: .02
2017: .07
2018: .11
2019: .17
One concern is how do they make money? It seems to be mainly advertising on their website and using the discount cards, which pharmacies will give Goodrx a fee. There is also a monthly subscription that can get alot of drugs for $10 or less, which is called Goodrx Gold. This is a nice change where you will know the price of the drug you bought even before you order. We shall see how this breakout will work.
$GDRX is giving a GREAT IPO LONG opportunity todayIPO intraday trading strategy idea
GoodRx is a platform for prescription price comparison and negotiating with pharmacy benefits managers (PBM) to receive cost-savings for its users.
The share price is rising and gonna continue this trend today.
The demand for shares of the company still looks higher than the supply.
These and other conditions can cause a rise in the share price today.
So I opened a long position from $49,5;
stop-loss — $45,5;
take-profit — $61,5.
Do not view this idea as a recommendation for trading or investing. It is published only to introduce my own vision.
Always do your own analysis before making deals. When you use any materials, do not rely on blind trust.
You should remember that isolated deals do not give systematic profit, so trade/invest using a developed strategy.
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