Share of GoodRx Holdings(NASDAQ: GDRX) rose more than 32% for the week, as of Thursday at 2:15 p.m. ET, according to data provided by S&P Global Market Intelligence. The healthcare stock is up more than 51% so far this year.
GoodRx offers a digital healthcare platform designed to save consumers money on prescription drugs. The company announced on Wednesday that it had entered into an agreement with CVS Health that creates a program, Caremark Cost Saver, that uses GoodRx's prescription pricing to lower out-of-pocket drug costs to CVS Caremark client members.
CVS Caremark is the largest U.S. pharmacy benefits manager. It processed 2.3 billion claims last year, so that should help expand GoodRx's business considerably. CVS Caremark will pay the company a referral fee when its clients use GoodRx pricing. Last year, GoodRx entered into a similar agreement with Cigna's Express Scripts that took effect this year.
The deal is great news for long-term GoodRx investors since it should provide a steady revenue stream and more exposure to the company's services. The impact won't be felt immediately; the program will begin at the start of 2024.
GoodRx's numbers have been down so far this year. In the first quarter, the company reported $184 million in revenue, down 10% year over year, and a net income loss of $3.3 million compared to a net income gain of $12.3 million in 2022. The company also issued guidance to say it expects $750 million to $775 million in revenue this year, flat at the midpoint.
Shares have risen since the company settled a Federal Trade Commission investigation in February regarding the misuse of patient data that led to a $1.5 million fine and other remedies.
10 stocks we like better than GoodRx
When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and GoodRx wasn't one of them! That's right -- they think these 10 stocks are even better buys.
*Stock Advisor returns as of July 10, 2023