Analyzing CareDx (NASDAQ:CDNA) and GoodRx (NASDAQ:GDRX)

CareDx (NASDAQ:CDNA) and GoodRx (NASDAQ:GDRX) are both small-cap medical companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, dividends, risk, analyst recommendations, valuation and institutional ownership.

Institutional & Insider Ownership

63.8% of GoodRx shares are held by institutional investors. 4.4% of CareDx shares are held by company insiders. Comparatively, 4.5% of GoodRx shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
CareDx	17.97%	18.03%	12.88%
GoodRx	4.33%	8.86%	4.50%

Volatility and Risk

CareDx has a beta of 2.37, indicating that its share price is 137% more volatile than the S&P 500. Comparatively, GoodRx has a beta of 1.23, indicating that its share price is 23% more volatile than the S&P 500.

Valuation and Earnings

This table compares CareDx and GoodRx”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CareDx	$340.83 million	2.31	$52.55 million	$1.02	14.48
GoodRx	$799.87 million	1.44	$16.39 million	$0.10	33.10

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

Analyst Recommendations

This is a breakdown of current ratings and price targets for CareDx and GoodRx, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CareDx	2	3	4	0	2.22
GoodRx	1	6	5	0	2.33

CareDx currently has a consensus price target of $25.50, suggesting a potential upside of 72.65%. GoodRx has a consensus price target of $5.80, suggesting a potential upside of 75.23%. Given GoodRx’s stronger consensus rating and higher probable upside, analysts plainly believe GoodRx is more favorable than CareDx.

About CareDx

CareDx, Inc. engages in the discovery, development, and commercialization of diagnostic solutions for transplant patients and caregivers in the United States and internationally. It also provides AlloSure Kidney, a donor-derived cell-free DNA (dd-cfDNA) solution for kidney transplant patients; AlloMap Heart, a gene expression solution for heart transplant patients; AlloSure Heart, a dd-cfDNA solution for heart transplant patients; and AlloSure Lung, a dd-cfDNA solution for lung transplant patients. The company offers Olerup SSP, which is used to type human leukocyte antigen (HLA) alleles based on sequence specific primer technology; QTYPE that enables precision in HLA typing; and Ottr, a transplant patient management software. In addition, it provides AlloSeq Tx, a high-resolution HLA typing solution; AlloSeq cfDNA, a surveillance solution to measure dd-cfDNA in blood; AlloSeq HCT, a solution for chimerism testing for stem cell transplant recipients; Allocell, a surveillance solution that monitors the level of engraftment and persistence of allogeneic cells for patients who have received cell therapy transplants; and XynQAPI cloud-based transplant quality management software, as well as AlloCare, a mobile app that offers a patient-centric resource for transplant recipients. The company offers its products directly to customers, as well as through third-party distributors and sub-distributors. It has a license agreement with Illumina, Inc. for the distribution, development, and commercialization of NGS products and technologies; and Cibiltech SAS to commercialize iBox, a software for the predictive analysis of post-transplantation kidney allograft loss. The company was formerly known as XDx, Inc. and changed its name to CareDx, Inc. in March 2014. The company was incorporated in 1998 and is headquartered in South San Francisco, California.

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.