GoodRx Holdings, Inc. (NASDAQ:GDRX) is a digital healthcare platform that provides consumers with information and tools to compare prescription drug prices and access discounts. The company operates in a competitive landscape alongside other digital health and software companies. A key metric to assess its financial performance is the comparison between Return on Invested Capital (ROIC) and Weighted Average Cost of Capital (WACC).
GoodRx's ROIC is 3.25%, while its WACC is 11.62%, resulting in a ROIC to WACC ratio of 0.28. This indicates that GoodRx is not generating returns that exceed its cost of capital. This is a critical measure as it suggests the company is not currently using its capital efficiently to create value for shareholders.
In comparison, American Well Corporation (AMWL) has a ROIC of -64.39% and a WACC of 9.28%, leading to a ROIC to WACC ratio of -6.94. Similarly, JFrog Ltd. (FROG) and Asana, Inc. (ASAN) also show negative ROIC to WACC ratios of -1.35 and -5.97, respectively. These figures highlight that these companies are also struggling to generate returns above their cost of capital.
nCino, Inc. (NCNO) presents a slightly better picture with a ROIC of -0.67% and a WACC of 7.08%, resulting in a ROIC to WACC ratio of -0.10. Although still negative, it is closer to breaking even compared to its peers. This suggests that nCino is slightly more efficient in its capital usage than others in the group.
Doximity, Inc. (DOCS) stands out with a ROIC of 16.62% and a WACC of 10.35%, achieving a ROIC to WACC ratio of 1.61. This positive ratio indicates that Doximity is effectively using its capital to generate returns well above its cost, showcasing strong capital efficiency. This makes Doximity the leader in capital utilization among its peers.
