On Thursday, GoodRx Holdings Inc. (NASDAQ: GDRX) saw its share price target increased to $14.00 from $12.00 by TD Cowen, while the firm maintained an Outperform rating on the stock. The adjustment comes as the analyst expresses continued optimism about the company's integrated service provider (ISP) opportunity and its potential to contribute significantly to earnings estimates.
The analyst believes that GoodRx's guidance for 2024 could be on the conservative side, anticipating that pharmacy benefit manager (PBM) partners will increase the transactions and the number of lives covered by ISP throughout the year. This expansion is expected to drive the company's performance beyond current estimates.
GoodRx's minimal expected impact from direct contracting on pharmacy transaction revenue (PTR) and maximum allowable cost (MAC) in 2024 is also noted, suggesting a stable outlook for these financial metrics.
According to the firm, this stability, along with the strong growth implied for GoodRx's pharmaceutical Manufacturer Solutions, indicates that previous market concerns are starting to diminish.
The analyst's comments highlight the potential for GoodRx to outperform expectations due to these strategic developments. The maintenance of the Outperform rating alongside the price target raise reflects confidence in the company's ability to capitalize on its ISP opportunity and navigate the complexities of the healthcare market effectively.
GoodRx, known for offering prescription price comparison tools and drug discount cards, is poised to benefit from its partnerships and service expansions. The raised price target is a signal to investors that the company's growth trajectory and strategic initiatives may yield positive results in the near future.
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