Jim Cramer - Mad Money GoodRx Holdings GDRX-Q DON'T BUY Jan 21, 2022

IPO'd today and he likes this company. It's a prescription drug comparison tool, telling you the cheapest place to buy your meds in your area with an app. The company has now expanded into a telemedicine platform, a hot business now during Covid. Originally, it was priced around $24, then raised to $33, and today closed at $50.50. It has excellent financials in a business that's fast-growing. Also, it's driving medical costs for consumers down (in American's pricey, nightmarish healthcare system) and faces few competitors. It saves Americans money on drugs, he stresses. He uses their app himself and it has saved him $50K last year in meds. It had 48% revenue growth in first half-2020. Since 2016, compound annual growth has been 57%. They're profitable, with earnings topping $55 million in first half-2020 vs. $31 million first-half 2019, or 77% earnings growth. Massive. GoodRX is the most downloaded medical app on Google and Apple for the last three years. Only negative: their user count dipped in Q2 because of Covid lockdown. Problem is with today's close, it trades at 30x sales (not earnings) (To compare, Apple trades at 30x earnings.) Also, GoodRx's earnings remain small. He expects them to keep reporting spectacular earnings, and GoodRx's largest VC investor, Silverlight, bought $100 million in shares in today's IPO (usually, the VC cashes out during the IPO). Nibble at this now, but ideally would by in the $30s.

Allan Tong’s Discover Picks Trading on the Nasdaq, GoodRX IPO'd last week and doubled its asking price on day one. Then again, a few other tech IPO's also hit the markets recently and they too doubled. GoodRx offers a drug-comparison tool, indicating where to buy your prescriptions at the cheapest price. There's less need for that in Canada, which is blessed with universal healthcare, but can save thousands for the typical American. Read Uber Stock and Splunk Stock: 3 More Exciting Top Tech Stocks to Watch for our full analysis.

It got a brutal downgrade today the day after a brutal sell-off. A tough call. He wants to hear from the CEO and his strategy [in response to Amazon announcing it will run a pharmacy business].

2020 IPOs cost too much, and are worth buying now that they are out of style and cheaper. He uses their fabulous drug-comparison app which saves you a fortune. He's always suggested buying on lower levels. But it keeps facing headwinds: the rotation into reopening stocks, then the expiration of its lock-up and Amazon entering the health business. Buy ANY pullback.

He likes this and their coupon, but they're up against Amazon, at least that's how the market views it.