GoodRx signage on the outside of the Nasdaq on the day of its IPO, September 23, 2020.
Shares of discount drug prescription service GoodRx dropped 39% on Tuesday to a record low after the company reported weaker-than-expected revenue and issued a disappointing forecast.
GoodRx lets consumers search for the cheapest place to find a prescription and gives them a coupon to take to the pharmacy. The company makes money from ads on its site and referral fees, which have taken a hit during the Covid-19 pandemic.
“The reality is that the effects of Covid-19 have remained longer than we expected, and the resulting impact on our business has been greater than anticipated,” said Trevor Bezdek, GoodRx co-CEO, on the earnings call. “I want to acknowledge that we underestimated the length of time that Covid-19 would impact our business.”
GoodRx reported fourth-quarter revenue of $213.3 million, missing the average analyst estimate of $217.5 million, according to FactSet.
The closure of some medical offices and hesitation from consumers to see a doctor during the pandemic resulted in fewer prescriptions and refills over the last two years, said Doug Hirsch, GoodRx’s other co-CEO, in an interview.
“There’s this huge gap we thought was just going to backfill in, but then a lot of people just chose to not go back [to doctors],” Hirsch said. “It seems there will be this perpetual gap of consumers who don’t get diagnosed and don’t get the treatment they need.”
For investors, the company’s forecast is particularly problematic. GoodRx estimated 23% growth for the full year, which comes to about $917 million. Analysts were expecting $963 million, according to FactSet.
“We’ve gotten smarter with every new wave of Covid,” Hirsch said. “I think now at this point, we have two years of understanding of literally when the doctor’s office is closed, or when the consumer isn’t leaving their house.”
GoodRx also offers telehealth services. It purchased start-up HeyDoctor in 2019 so consumers can refill medications and receive advice about their prescriptions. And it has a service called GoodRx Gold, which offers a $9.99 monthly subscription for customers who have many prescriptions.
GoodRx went public in September 2020 and rocketed out of the gate, with the stock peaking at $64.22 that month. With Tuesday’s plunge, the shares are now trading at lower than $16.73, about 50% below where they debuted in the IPO. The company’s market value has sunk to $6.7 billion.
WATCH: GoodRx co-CEO discusses growth of its subscription business