Overview
Our long thesis is built entirely on a foundation of monthly average user growth. Our surveys suggest the population of potential users is significantly larger than the current run rate of 5M to 6M monthly average users. We also believe the impact of the pandemic was significant on prescription volume. We expect the re- open to unlock pent- up demand for health care services that should be significant and long lasting as care avoidance and the accumulation of acuity is likely to result in an uptick in visits and prescriptions. We believe we are seeing the very beginning of the reopening in recent weeks. Our MAU estimates for 1Q21 and 2Q21 are 5,978 and 6,451, respectively, compared to consensus of 5,910 and 6,230.
While telehealth maintained a large percentage of ongoing prescriptions, there is evidence the use of prescriptions in telemedicine visits was reduced significantly. There is ample evidence that a large percentage of the population has avoided in- person care, upwards of 40% at peak, and that these patients are only now returning to physician offices as COVID-19 vaccination penetration reaches the majority of the population.
There are clearly market concerns about Amazon's entry into the the drug coupon business, but we expect these concerns to fade with reacceleration in GoodRx's MAU trend. Right now, the ongoing decline in app downloads and app user data makes it appear that GoodRx is a business that is fully penetrated and being hit with share loss from other pharmacy discount cards, other third party cards, and a looming Amazon offering all threatening GoodRx's growth rate and multiple. We're taking the other side and assuming MAU re-acceleration provides the counter argument to "what about Amazon?" With accelerating MAU, 2022 estimates will begin to inflect higher, and we expect GDRX to be valued for the potential to leverage their user base, which we see as the key asset.
All data available upon request. Please reach out to with any inquiries.
Thomas Tobin
Managing Director
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