GoodRx stock tanks after company says it’s unlikely to achieve 2022 outlook amid issue with grocery chain

The shares of GoodRx Holdings Inc. sank in off-hours trading on Monday after the company, which offers tools to help consumers compare drug prices, exceeded expectations with its March quarter results, but found it unlikely to meet its year-round forecast due to recent actions by a grocery chain.

The company said in a letter to shareholders that a shopkeeper took stock in the latter part of the first quarter that affected the acceptance of discounted prices for certain drugs by pharmacy benefit managers, which are GoodRx’s GDRX.
clients. While the change had an “immaterial adverse impact” on first-quarter results, it is expected to have a more material impact on finances in the future.

“In April, this dynamic intensified, affecting more medicines in addition to grocery stores, resulting in a significant loss of volume and a greater expected impact on our revenue from prescription transactions in the second quarter and of the whole year, “the company said in the letter.

Shares fell 32% in out-of-hours trading on Monday.

GoodRx expects about $ 190 million in revenue for its second quarter, below the FactSet consensus, which was $ 215.6 million. The forecast assumes that the problem with the grocery chain continues during the “no improvement” quarter and assigns an estimated revenue impact of about $ 30 million to the dynamics.

The company also acknowledged that the grocery store problem is likely to affect the possibility of achieving its previously issued year-round outlook. This meant a growth of around 23% in revenue over the previous year.

“At this time, we believe it is unlikely that we will be able to meet the 2022 fiscal year guidance we offered on our fourth-quarter earnings call,” GoodRx said in its letter to shareholders. “At this time we will not offer year-round expectations, as the year-round impact of the grocery problem is difficult to estimate because there are several variables that include, among other things, the possible prices of the groceries. consumer and return usage levels that have not yet been determined. ”

The company generated first-quarter net income of $ 12.3 million, or 3 cents per share, compared to $ 1.7 million, or the balance per share, in the previous year. .

After adjusting for share-based compensation and other expenses, GoodRx gained 10 cents per share, compared to 7 cents per share the year before, while analysts followed by FactSet expected 8 cents per share.

GoodRx’s first-quarter revenue rose to $ 203.3 million from $ 160.4 million and surpassed FactSet’s consensus of $ 200.5 million.

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