Is GoodRx Stock a Buy?
Telemedicine is rising in popularity during the coronavirus pandemic, and it's been a hot place to invest in this year. Look no further than Teladoc, which has soared 169% so far in 2020. As patients and doctors adapt to a new normal and less face-to-face interaction, there's a growing need for more technology in the healthcare industry. That makes new issues in this part of the segment particularly attractive buys.
GoodRx (NASDAQ: GDRX) went public in September, and its shares soared 53% on their first day of trading. However, now that the dust has settled and the hype's died down, let's take a closer look at the stock and assess whether it's a good long-term investment worth adding to your portfolio today.
This is a question investors should always ask when evaluating a business for the first time. It's what billionaire investor Warren Buffett refers to as a "moat" -- a key benchmark he considers when deciding whether to invest in a business or not. The wider a company's moat, the safer it is from competition. The bulk of GoodRx's business centers around prescriptions. When someone uses a GoodRx code to fill a prescription, the company is entitled to earn a fee from the pharmacy benefits managers (PBM) that it has contracts with. In 2019, 94% of the company's sales were due to these prescription transactions.
Source Fool.com
