Investors Could Be Concerned With GoodRx Holdings' (NASDAQ:GDRX) Returns On Capital

Simply Wall St.2022-10-14

Finding a business that has the potential to grow substantially is not easy, but it is possible if we look at a few key financial metrics. Firstly, we'll want to see a proven return on capital ...

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Firstly, we'll want to see a proven return on capital ...</p>\n\n<a href=\"https://finance.yahoo.com/news/investors-could-concerned-goodrx-holdings-162510011.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"GDRX","symbol_name":"GoodRx Holdings, Inc.","start_time":0,"source_url":"https://finance.yahoo.com/news/investors-could-concerned-goodrx-holdings-162510011.html","article_id":"2275678195","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/CxXXLzpsMZlZupuEdSrGWg--~B/aD00MzI7dz0xMTk0O2FwcGlkPXl0YWNoeW9u/https://s.yimg.com/uu/api/res/1.2/g2_mg575ViI8K4GruDHCHQ--~B/aD00MzI7dz0xMTk0O2FwcGlkPXl0YWNoeW9u/https://media.zenfs.com/en/simply_wall_st__316/67ac92a32c5f9073ba3559a3e119b22a"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2275678195","pubTimestamp":1665678310,"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":"Finding a business that has the potential to grow substantially is not easy, but it is possible if w","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"GDRX":"GoodRx Holdings, Inc.","BK4211":"区域性银行","ISBC":"投资者银行","BK4167":"医疗保健技术"},"translate_title":"投资者可能会担心GoodRx Holdings（纳斯达克代码：GDRX）的资本回报率","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"GDRX":1,"ISBC":1,"NASDAQ":1},"content_text":"Finding a business that has the potential to grow substantially is not easy, but it is possible if we look at a few key financial metrics. Firstly, we'll want to see a proven return on capital employed (ROCE) that is increasing, and secondly, an expanding base of capital employed. Basically this means that a company has profitable initiatives that it can continue to reinvest in, which is a trait of a compounding machine. Having said that, from a first glance at GoodRx Holdings (NASDAQ:GDRX) we aren't jumping out of our chairs at how returns are trending, but let's have a deeper look. \n Understanding Return On Capital Employed (ROCE) \n For those that aren't sure what ROCE is, it measures the amount of pre-tax profits a company can generate from the capital employed in its business. Analysts use this formula to calculate it for GoodRx Holdings: \n Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) \n0.023 = US$34m ÷ (US$1.6b - US$80m) (Based on the trailing twelve months to June 2022).\n So, GoodRx Holdings has an ROCE of 2.3%.  Ultimately, that's a low return and it under-performs the Healthcare Services industry average of 7.6%. \n Check out our latest analysis for GoodRx Holdings \n\n\n\n  NasdaqGS:GDRX Return on Capital Employed October 13th 2022\n \n\n In the above chart we have measured GoodRx Holdings' prior ROCE against its prior performance, but the future is arguably more important. If you'd like, you can check out the forecasts from the analysts covering GoodRx Holdings here  for free. \n How Are Returns Trending? \n In terms of GoodRx Holdings' historical ROCE movements, the trend isn't fantastic. To be more specific, ROCE has fallen from 33% over the last three years. Although, given both revenue and the amount of assets employed in the business have increased, it could suggest the company is investing in growth, and the extra capital has led to a short-term reduction in ROCE. And if the increased capital generates additional returns, the business, and thus shareholders, will benefit in the long run. \n What We Can Learn From GoodRx Holdings' ROCE \n While returns have fallen for GoodRx Holdings in recent times, we're encouraged to see that sales are growing and that the business is reinvesting in its operations. Despite these promising trends, the stock has collapsed 89% over the last year, so there could be other factors hurting the company's prospects. Therefore, we'd suggest researching the stock further to uncover more about the business. \n If you're still interested in GoodRx Holdings it's worth checking out our  FREE intrinsic value approximation  to see if it's trading at an attractive price in other respects. \n While GoodRx Holdings isn't earning the highest return, check out this free list of companies that are earning high returns on equity with solid balance sheets. \nHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.\nJoin A Paid User Research SessionYou’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":1,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2275678195"}