OVERVIEW
GoodRx carries a ~10M short interest, which against the 411M shares outstanding is trivial, but against the 44M share float, represents a risk for both longs and shorts. The debate centers on the total addressable market (TAM) and the impact of competition from Amazon and others. While competition has emerged, we think it will take an extended period of time for GoodRx to be impacted, if at all, and the TAM is likely closer to 40M patients.
Moreover, a discussion of the TAM and competition should take a back seat to expectations for the post- COVID recovery over the coming months as the COVID-19 vaccine takes hold. Both data and anecdotes point to high levels of pent- up demand. We expect GoodRx to report an in- line 4Q20 and guide slightly above the street for 1Q21. Meanwhile, we expect the data and anecdotes to increasingly reflect an accelerating tailwind from the post- COVID return of in- person care.
March 2021 Survey | Our survey completed this week shows 40 percent of respondents delayed some sort of care during the pandemic. We expect as these patients return to in- person care they are likely to receive a prescription. The same survey also shows GoodRx continues to enjoy the vast majority of drug coupon use. More importantly, the percentage of people who have already used GoodRx or are likely to use GoodRx remains consistent with our December Survey. For people who state they get their insurance through their job, 15% are current users with another 34% who are "likely users." These results counter the view that GoodRx is limited to the uninsured population, and ultimately a small TAM.
Risks | Despite its mixed history as a tool for forecasting results, the app data doesn't look good heading into the print. While there are 127M vaccine doses in the system as of today, only 32M people are fully vaccinated. This covers roughly half the at risk population starting with the least mobile first. It won't be until the end of March and getting past 50M that we'd expect to see the first signs that pent- up demand is returning.
All data available upon request. Please reach out to with any inquiries.
Thomas Tobin
Managing Director
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