By Sam Boughedda
After the close on Wednesday, GoodRx Holdings Inc (NASDAQ:GDRX) announced that its board had approved layoffs of 16% of its workforce, or 140 employees.
The company said the action is part of its initiatives to re-balance its investments and cost structure into prioritized areas that it believes will drive incremental long-term growth and improve margins.
Following the news, a BofA analyst maintained a Buy rating and a $13 per share price target on the stock.
He told investors in a note that GoodRx "expects to incur pre-tax one-time charges of $5-$7MM (mostly in 3Q'22), with estimated annualized cash savings of $23-$25MM. Layoffs will mostly impact the company's tech-focused and marketing groups."
"We believe that these moves are prudent for GoodRx as the company undergoes a bit of a growth reset following the now-addressed Kroger PBM dispute and after facing Covid-related headwinds," explained the analyst.
He continued: "Our Buy rating is predicated on GoodRx’s growth and profitability profile at an attractive valuation, and we view today’s announcement as an incremental positive within that framework relative to a rebound in profit growth."
GoodRx shares declined over 6% in Thursday's session.