What Happened?
Shares of healthcare tech company GoodRx (NASDAQ: GDRX) jumped 3.7% in the afternoon session after investor enthusiasm continued following its recent partnership with Danish pharmaceutical giant Novo Nordisk.
The positive momentum is a continuation of a significant rally that began on August 18, when the stock initially surged 37% upon the announcement. The deal allows GoodRx to offer popular diabetes and weight-loss drugs Wegovy and Ozempic to self-paying customers for a fixed price of $499 for a month's supply. This represents a substantial discount, being half the typical self-pay price for Wegovy and about a third for Ozempic. Investors appear to remain optimistic that this partnership will provide a major customer and marketing boost for the prescription medication discount company.
After the initial pop the shares cooled down to $4.33, up 2.1% from previous close.
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What Is The Market Telling Us
GoodRx’s shares are extremely volatile and have had 30 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 6 days ago when the stock dropped 7.7% on the news that the major indices continued to pull back, with technology stocks accounting for most of the market's largest decliners.
A key reason for this trend is that much of the recent market gains were concentrated in the "AI trade," which includes these large technology and semiconductor companies. So this could also mean that some investors are locking in some gains ahead of more definitive feedback from the Fed.
Despite the downturn, some analysts viewed this as an opportunity to own some of the "Core AI winners." Dan Ives of Wedbush Securities commented, "In our view, the tech bull cycle will be well intact for at least another 2-3 years, given the trillions being spent on AI infrastructure/software/chips/power/apps looking ahead. This remains our tech playbook and investor roadmap." Additionally, mixed earnings reports from retailers, such as Target, have added to the market's weakness. Investors are closely monitoring these reports for insights into the broader economic health and the potential impact of new tariffs on inflation.
GoodRx is down 4.9% since the beginning of the year, and at $4.33 per share, it is trading 49.5% below its 52-week high of $8.59 from August 2024. Investors who bought $1,000 worth of GoodRx’s shares at the IPO in September 2020 would now be looking at an investment worth $85.83.
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