Value
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.5 |
| P/S | 9.4 |
| EV/EBITDA | 4.6 |
| Fwd P/E | 9.5 |
| PEG | 10.0 |
| Analyst target | 3.0 |
- ▸Forward P/E: 8.5x
- ▸PEG: 0.02
GDRX · Why this verdict
Why GoodRx Holdings (GDRX) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score4.3/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
GoodRx converts cash exceptionally well, at 412% of net income, even as revenue is declining roughly 4% year over year. Quality breakdown | FCF-to-net-income conversion should stay strong, well above 100%, even if revenue growth stays weak, supporting continued buybacks or debt paydown. | →Stable |
| CounterExtremely high FCF-to-net-income ratios can reflect one-time working-capital tailwinds rather than a repeatable pattern, and could normalize sharply lower. | ||
Revenue is declining roughly 4% year over year and the company fails the Rule of 40 test, scoring 6 versus the 40 pass bar, signaling weak growth. Growth breakdown | Revenue growth should turn positive and combined growth-plus-margin should approach the Rule of 40 pass bar over the next several quarters. | →Stable |
| CounterA single soft quarter of Rule of 40 underperformance doesn't necessarily indicate structural decline if cost discipline offsets slower top-line growth. | ||
The engine's asymmetry gate failed at -0.62, meaning downside risk of 15% currently outweighs the -9.3% upside already past the analyst target. Engine gate (failed) | The asymmetry ratio should turn positive as either the stock pulls back to a better entry or analyst targets are raised. | →Stable |
| CounterA negative asymmetry reading near a reached price target can persist if the stock stays range-bound rather than reverting. | ||
The stock is attempting a technical recovery from a death cross, with RSI at 71 and MACD improving, per the engine's setup classification. Chart pattern detection | The recovery should continue with RSI cooling into a healthy range while price holds above short-term support. | →Stable |
| CounterAn RSI of 71 signals overbought conditions that often precede a near-term pullback rather than continued follow-through. | ||
GoodRx converts cash exceptionally well, at 412% of net income, even as revenue is declining roughly 4% year over year.
→StableQuality breakdown
- Expectation
- FCF-to-net-income conversion should stay strong, well above 100%, even if revenue growth stays weak, supporting continued buybacks or debt paydown.
CounterExtremely high FCF-to-net-income ratios can reflect one-time working-capital tailwinds rather than a repeatable pattern, and could normalize sharply lower.
Revenue is declining roughly 4% year over year and the company fails the Rule of 40 test, scoring 6 versus the 40 pass bar, signaling weak growth.
→StableGrowth breakdown
- Expectation
- Revenue growth should turn positive and combined growth-plus-margin should approach the Rule of 40 pass bar over the next several quarters.
CounterA single soft quarter of Rule of 40 underperformance doesn't necessarily indicate structural decline if cost discipline offsets slower top-line growth.
The engine's asymmetry gate failed at -0.62, meaning downside risk of 15% currently outweighs the -9.3% upside already past the analyst target.
→StableEngine gate (failed)
- Expectation
- The asymmetry ratio should turn positive as either the stock pulls back to a better entry or analyst targets are raised.
CounterA negative asymmetry reading near a reached price target can persist if the stock stays range-bound rather than reverting.
The stock is attempting a technical recovery from a death cross, with RSI at 71 and MACD improving, per the engine's setup classification.
→StableChart pattern detection
- Expectation
- The recovery should continue with RSI cooling into a healthy range while price holds above short-term support.
CounterAn RSI of 71 signals overbought conditions that often precede a near-term pullback rather than continued follow-through.
TrendMatrix Research · core thesis
Engine thesis — one sentence
GoodRx pairs unusually strong cash conversion with declining revenue and a failed Rule of 40 test, while the engine's asymmetry gate reads negative and the technical setup is an overbought recovery attempt from a death cross.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
4.7/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 1.1 |
| ROA | 2.3 |
| Gross margin | 10.0 |
| Op margin | 2.9 |
| Net margin | 1.3 |
| Current ratio | 5.4 |
| FCF quality | 10.0 |
| Moat | 4.6 |
| Rule of 40 | 3.0 |
| Piotroski F | 6.7 |
- ▸Excellent cash conversion: 412% FCF/NI
- ▸No competitive moat
- ▸Rule of 40: 6 (fail)
Growth
1.4/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 1.4 |
- ▸Declining revenue: -4%
Momentum
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.4 |
| MACD | 7.3 |
| OBV | 10.0 |
| MA position | 8.0 |
| Volume | 3.3 |
- ▸Overbought (RSI 71)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-MA but MA slope flat
Sentiment
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 5.5 |
| erm sentiment | 5.0 |
Insider
5.1/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.2 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
3.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.2 |
| quality rank | 6.3 |
| growth rank | 0.0 |
Technical
0.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 0.9 |
| 52w position | 0.6 |
Risk (lower is worse)
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 6.0 |
| days to cover | 5.8 |
| volatility | 1.1 |
| put call | 10.0 |
| max pain risk | 3.0 |
| beta | 4.6 |
| debt equity | 5.8 |
- ▸Above max pain $0
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
2.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 0.0 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- MOMENTUM:6.6>=5.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:31d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.7=NEGATIVE
Warning (2)
- DEATH_CROSS:momentum=6.6>=5.0 recovering
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.68
Upside
-10.2%
Downside
15.0%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 71
EdgeNo clear edge — No clear edge identified
SuitabilitySpeculative — Drawdown -47% (>40% off 52w high)
Investment implication
The F-path SELL output reflects an overall score of 4.3 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Value at 6.7) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-0.7=NEGATIVE) reinforce the read. Current asymmetry R:R is -0.68 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 6.7, Momentum at 6.6, and Sentiment at 5.2; the weakest are Technical at 0.5, Growth at 1.4, and Catalyst at 2.5. The V9 engine flagged 1 failed gate with 2 warnings, producing an asymmetric reward-to-risk of -0.68 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Excellent Cash Conversion Despite Decline
Trip ifFCF-to-net-income conversion falls below 100% in the next reported quarter, down from the current 412%.
- P2Revenue Decline Growth Failure
Trip ifRevenue growth stays below 0% for 2 more consecutive quarters.
- P3Negative Asymmetry Gate Failure
Trip ifAsymmetry ratio rises above 0, turning positive from the current -0.62.
- P4Overbought Recovery Setup
Trip ifRSI falls below 30, or price closes below its 200-day moving average, invalidating the recovery setup.