Value
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 1.5 |
| P/S | 9.3 |
| EV/EBITDA | 4.1 |
| Fwd P/E | 9.3 |
| PEG | 10.0 |
| Analyst target | 4.0 |
- ▸Forward P/E: 9.9x
- ▸PEG: 0.02
GDRX · Why this verdict
Why GoodRx Holdings (GDRX) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictSELL
Overall score4.3/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
GoodRx converts earnings to cash extremely well (692% of net income) at a forward P/E of 10.1x, but revenue is flat to declining, 68% of revenue comes from one product line, insiders sold about $9.7M and the stock trades above the analyst target.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The prescription transactions offering generates 68.0% of the business, concentrating results in one product line. Bear case | Revenue from subscription and other offerings grows so the prescription share falls below 65%. | ↓Deteriorating |
| CounterConcentration in the core transactions product reflects a strong market position, and management can expand other lines gradually. | ||
Free cash flow is 692% of net income, though the Rule of 40 score is only 13 and the business has no competitive moat. Quality breakdown | Free cash flow stays above 150% of net income over the next 12 months. | →Stable |
| CounterNet income is thin (net margin component 1.0), so the cash conversion ratio is inflated by a small denominator and non-cash charges. | ||
Revenue is declining about 1%, with quarterly revenue of $200.4M versus $203.1M a year earlier, and EPS has been in line with estimates in each of the last four quarters. Growth breakdown | Quarterly revenue grows above $210M year over year. | →Stable |
| CounterSequential revenue recovered from $194.0M to $200.4M and the next-quarter estimate is $202.1M, suggesting stabilization. | ||
Insiders sold about $9.68M of stock across 14 sales in 90 days (roughly 0.8% of market cap) with no purchases. Insider | Insider selling slows to below $2M per quarter. | →Stable |
| CounterSales may be scheduled or tax-related and the stock has risen above its 200-day average, which could make selling routine. | ||
At $3.54 the stock trades 2.9% above the $3.44 analyst target, leaving no analyst-supported upside. Upside pct | Analyst targets are raised above the current price after the November report. | →Stable |
| CounterThe golden cross and rising volume accumulation signal improving sentiment that targets may not yet reflect. | ||
The prescription transactions offering generates 68.0% of the business, concentrating results in one product line.
↓DeterioratingBear case
- Expectation
- Revenue from subscription and other offerings grows so the prescription share falls below 65%.
CounterConcentration in the core transactions product reflects a strong market position, and management can expand other lines gradually.
Free cash flow is 692% of net income, though the Rule of 40 score is only 13 and the business has no competitive moat.
→StableQuality breakdown
- Expectation
- Free cash flow stays above 150% of net income over the next 12 months.
CounterNet income is thin (net margin component 1.0), so the cash conversion ratio is inflated by a small denominator and non-cash charges.
Revenue is declining about 1%, with quarterly revenue of $200.4M versus $203.1M a year earlier, and EPS has been in line with estimates in each of the last four quarters.
→StableGrowth breakdown
- Expectation
- Quarterly revenue grows above $210M year over year.
CounterSequential revenue recovered from $194.0M to $200.4M and the next-quarter estimate is $202.1M, suggesting stabilization.
Insiders sold about $9.68M of stock across 14 sales in 90 days (roughly 0.8% of market cap) with no purchases.
→StableInsider
- Expectation
- Insider selling slows to below $2M per quarter.
CounterSales may be scheduled or tax-related and the stock has risen above its 200-day average, which could make selling routine.
At $3.54 the stock trades 2.9% above the $3.44 analyst target, leaving no analyst-supported upside.
→StableUpside pct
- Expectation
- Analyst targets are raised above the current price after the November report.
CounterThe golden cross and rising volume accumulation signal improving sentiment that targets may not yet reflect.
Per-dimension breakdown
Quality
4.8/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.8 |
| ROA | 2.0 |
| Gross margin | 10.0 |
| Op margin | 4.7 |
| Net margin | 1.0 |
| Current ratio | 5.1 |
| FCF quality | 10.0 |
| Moat | 4.6 |
| Rule of 40 | 3.0 |
| Piotroski F | 6.7 |
- ▸Excellent cash conversion: 692% FCF/NI
- ▸No competitive moat
- ▸Rule of 40: 13 (fail)
Growth
2.2/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 2.2 |
- ▸Declining revenue: -1%
Momentum
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 6.6 |
| OBV | 1.0 |
| MA position | 9.0 |
| Volume | 0.0 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.8 |
| Analyst rating | 5.0 |
| Price target | 6.8 |
Insider
3.2/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 2.0 |
| insider conviction | 2.0 |
| holder change | 5.5 |
- ▸Heavy insider selling — $9,678,712 (0.818% of mkt cap)
Peer rank
2.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.9 |
| quality rank | 4.6 |
| growth rank | 0.5 |
Technical
3.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 3.3 |
| support resistance | 3.0 |
| 52w position | 2.1 |
| gap | 5.0 |
Risk (lower is worse)
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.1 |
| days to cover | 6.2 |
| volatility | 4.0 |
| put call | 10.0 |
| beta | 4.4 |
| debt equity | 6.0 |
| news risk | 3.5 |
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
4.1/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings timing | 5.0 |
| surprise avg | 0.5 |
| news activity | 6.0 |
- ▸Earnings in 5 days
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (2)
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (4)
- MOMENTUM:4.4<4.5
- ASYMMETRY:-0.2=NEGATIVE
- INSIDER:0.82%=EXTREME
- EARNINGS_PROXIMITY:5d<=7d
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.24
Upside
-2.1%
Downside
8.8%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 54, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — Beta 1.69>1.3, MCap $1.2B<$5B
Investment implication
The F-path SELL output reflects an overall score of 4.3 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Value at 6.6) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:4.4<4.5, ASYMMETRY:-0.2=NEGATIVE, INSIDER:0.82%=EXTREME) reinforce the read. Current asymmetry R:R is -0.24 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 6.6, Risk (lower is worse) at 6.0, and Sentiment at 5.8; the weakest are Growth at 2.2, Peer rank at 2.9, and Insider at 3.2. The V9 engine flagged 4 failed gates with 1 warning, producing an asymmetric reward-to-risk of -0.24 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Prescription Transaction Concentration
Trip ifPrescription transactions share exceeds 75% of the business from the current 68.0%.
- P2Strong Cash Conversion
Trip ifFree cash flow falls below 100% of net income from the current 692%.
- P3Flat To Declining Revenue
Trip ifYear-over-year revenue growth exceeds 5% for 2 consecutive quarters.
- P4Heavy Insider Selling
Trip ifInsider sales total more than $20M over 90 days from the current $9.68M.
- P5Price Above Analyst Target
Trip ifAnalyst target rises above $3.89, at least 10% above the current $3.54 price.