Evolent Health (NYSE:EVH) versus GoodRx (NASDAQ:GDRX) Critical Analysis

Evolent Health (NYSE:EVH) and GoodRx (NASDAQ:GDRX) are both small-cap healthcare companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, earnings, valuation, profitability, risk and dividends.

Earnings & Valuation

This table compares Evolent Health and GoodRx”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Evolent Health	$1.88 billion	0.24	-$534.51 million	($4.57)	-0.86
GoodRx	$796.85 million	1.57	$30.44 million	$0.04	91.50

GoodRx has lower revenue, but higher earnings than Evolent Health. Evolent Health is trading at a lower price-to-earnings ratio than GoodRx, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Evolent Health has a beta of 0.8, indicating that its share price is 20% less volatile than the S&P 500. Comparatively, GoodRx has a beta of 1.6, indicating that its share price is 60% more volatile than the S&P 500.

Profitability

This table compares Evolent Health and GoodRx’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Evolent Health	-24.08%	-4.27%	-1.06%
GoodRx	2.07%	7.22%	2.53%

Insider and Institutional Ownership

63.8% of GoodRx shares are held by institutional investors. 1.5% of Evolent Health shares are held by company insiders. Comparatively, 5.9% of GoodRx shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and price targets for Evolent Health and GoodRx, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Evolent Health	1	4	12	0	2.65
GoodRx	3	6	4	0	2.08

Evolent Health currently has a consensus price target of $6.09, suggesting a potential upside of 54.94%. GoodRx has a consensus price target of $3.98, suggesting a potential upside of 8.67%. Given Evolent Health’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Evolent Health is more favorable than GoodRx.

Summary

GoodRx beats Evolent Health on 10 of the 14 factors compared between the two stocks.

About Evolent Health

Evolent Health, Inc., through its subsidiary, Evolent Health LLC, offers specialty care management services in oncology, cardiology, and musculoskeletal markets in the United States. The company provides platform for health plan administration and value-based business infrastructure. It offers administrative services, such as health plan services, pharmacy benefits management, risk management, analytics and reporting, and leadership and management; and Identifi, a proprietary technology system that aggregates and analyzes data, manages care workflows, and engages patients. In addition, the company provides holistic total cost of care management. Evolent Health, Inc. was founded in 2011 and is headquartered in Arlington, Virginia.

About GoodRx

GoodRx Holdings, Inc., together with its subsidiaries, offers information and tools that enable consumers to compare prices and save on their prescription drug purchases in the United States. The company operates a price comparison platform that provides consumers with curated, geographically relevant prescription pricing, and access to negotiated prices. It also offers other healthcare products and services, including subscriptions, and pharma manufacturer solutions, as well as telehealth services through the GoodRx Care platform. It serves pharmacy benefit managers who manage formularies and prescription transactions, including establishing pricing between consumers and pharmacies. The company was founded in 2011 and is headquartered in Santa Monica, California.