Overview
We have been expecting a recovery in medical consumption as medical consumers return to in- person care. What we had measured as pent- up demand showed what looked like a wall of demand that would flow through physician offices, diagnostic imaging, and pharmacies. We're seeing evidence growth consumption is accelerating in places, but it has been slow to develop and uneven. Where cancer testing is ramping for many labs, and physical therapy trends are improving, we don't see the same for GoodRx search trends, or the prescription drug quantity index, or physician office hiring. Our MAU forecast for 2Q21 is 5,909K which is slightly below consensus of 5,940K. Consensus has softened in recent weeks from 6,220 which was more in- line with management commentary that they exited 1Q21 at 6,100.
There is reason to remain constructive on GDRX. Based on our survey work, we believe the TAM is significantly larger than their current MAU run rate. Also, their relationship with the consumer is strong and can be leveraged consistent with their brand as they offer more services and upgrade more users to subscriptions while also building a pharma services business. To be successful, though, MAU needs to move higher. Another weak print validates the short view that the TAM is smaller and more penetrated than the company suggests, and that their business model relies on the byzantine pharmaceutical supply chain, and is ultimately fragile to competition.
MicroQuads improve 3Q21, and we'll monitor for a shift in the underlying data.
All data available upon request. Please reach out to with any inquiries.
Thomas Tobin
Managing Director
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