Goodrx Holdings Inc (NASDAQ: GDRX) closed roughly 50% higher on August 18th after Bagsværd-headquartered Novo Nordisk (NYSE: NVO) announced a GLP-1 partnership with the healthcare platform.
According to the companies’ joint press release today, “all strengths of Ozempic and Wegovy are now available to eligible self-paying patients for $499/month through GoodRx.”
Goodrx stock hasn’t been particularly exciting for investors this year. Despite the explosive move on Monday, it’s down more than 40% versus its 52-week high in August of 2024.
Why is Novo Nordisk deal a positive for Goodrx stock?
Novo Nordisk partnership is meaningfully positive for GDRX shares as it could enable the health-care platform to capitalise on continued momentum in the obesity and diabetes drug market.
Offering the Danish firm’s GLP-1 drugs at significantly lower price to self-paying clients expands its value proposition and stands to attract a massive, in-demand user base.
Simply put, the NVO agreement offers a clear path to revenue growth and validates Goodrx as a powerful platform for manufacturers to reach patients, bolstering investor confidence and future prospects.
Since demand for weight-loss and diabetes medications is soaring worldwide, over time, this deal could unlock significant further upside in Goodrx stock price.
BofA says NVO agreement not a reason to buy GDRX shares
According to a senior Bank of America analyst, Allen Lutz, the Novo Nordisk partnership sure is a bullish catalyst for Goodrx shares, but it alone is not a sufficient reason to invest in this healthcare stock.
On Monday, the investment firm reiterated its “underperform” rating on GDRX shares – warning pharmacy closures and shifting reimbursement dynamics could reverse today’s gains over the next few weeks.
In his research note, Lutz maintained his $3.40 price target on Goodrx Holdings, which indicates potential downside of roughly 30% from current levels.
Meanwhile, Goodrx shares do not currently pay a dividend to appear any more attractive as a long-term holding – at least for income-focused investors.
Should you invest in Goodrx Holdings Inc today?
Despite a euphoric surge on Monday, Goodrx stock remains a complex investment.
While the NVO agreement injects fresh momentum and validates its role in the GLP-1 ecosystem, structural headwinds, nonetheless, persist – demanding caution in buying GDRX shares at current levels.
For now, the healthcare platform’s future hinges on whether it can convert this breakthrough into durable performance – or if Monday’s rally proves a fleeting moment of optimism only.
Interestingly, Wall Street firms largely believe the former will playout in the long run. According to The Wall Street Journal, the consensus rating on Goodrx Holdings currently sits at “overweight” with price targets going as high as $7.0, indicating potential “upside” of another 35% from here.
So, it’s fair to conclude that Allen Lutz is actually among the more bearish analysts on GDRX. The rest of Wall Street doesn’t necessarily agree with his cautious stance on the healthcare stock.
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