GoodRx Holdings, Inc. (NASDAQ:GDRX) Financial Efficiency Analysis

• GoodRx's ROIC of 3.25% is significantly lower than its WACC of 11.82%, indicating inefficiency in generating returns above its cost of capital.
• Comparative analysis shows that most peers, including American Well Corporation and JFrog Ltd., also struggle with negative ROIC to WACC ratios, highlighting a common challenge in the sector.
• Doximity, Inc. stands out with a positive ROIC of 16.62% and a WACC of 10.42%, showcasing its financial efficiency and growth potential in the competitive landscape.

GoodRx Holdings, Inc. (NASDAQ:GDRX) is a digital healthcare platform that provides consumers with access to affordable prescription medications. The company operates in a competitive landscape alongside peers like American Well Corporation, JFrog Ltd., Asana, Inc., nCino, Inc., and Doximity, Inc. These companies are part of the broader healthcare and technology sectors, each with unique business models and financial metrics.

In evaluating GoodRx's financial efficiency, its Return on Invested Capital (ROIC) is 3.25%, which is significantly lower than its Weighted Average Cost of Capital (WACC) of 11.82%. This results in a ROIC to WACC ratio of 0.28, indicating that GoodRx is not currently generating returns that exceed its cost of capital. This suggests that the company may need to reassess its investment strategies to improve its financial performance.

Comparatively, American Well Corporation (AMWL) has a ROIC of -64.39% and a WACC of 9.32%, resulting in a ROIC to WACC ratio of -6.91. This negative ratio highlights inefficiencies in generating returns relative to its cost of capital. Similarly, JFrog Ltd. (FROG) and Asana, Inc. (ASAN) also show negative ROIC to WACC ratios of -1.34 and -6.01, respectively, indicating challenges in achieving profitable returns.

nCino, Inc. (NCNO) presents a slightly better picture with a ROIC of -0.68% and a WACC of 7.15%, leading to a ROIC to WACC ratio of -0.10. Although still negative, nCino's ratio is closer to breaking even compared to its peers. This suggests that nCino may be on a path to improving its financial efficiency.

Doximity, Inc. (DOCS) stands out with a positive ROIC of 16.62% and a WACC of 10.42%, resulting in a ROIC to WACC ratio of 1.59. This indicates that Doximity is effectively generating returns above its cost of capital, making it the most financially efficient company among its peers. This efficiency suggests strong growth potential for Doximity in the competitive landscape.