GDRX, GoodRx Holdings Inc.

Will it survive?

• Can it pay its interest? 2.1×
  Adequate
  Operating income $87M ÷ interest expense $43M
  What this means

  Comfortable in a normal year, but below the margin of safety Graham looked for. Worth checking how stable the coverage has been across a full cycle.

• How heavy is the debt, net of cash? $226M · 2.6× operating profit
  Meaningful net debt
  Cash $262M − debt $488M
  What this means

  Netting $262M of cash and short-term investments against $488M of debt leaves $226M owed, about 2.6× a year's operating profit (5.6× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.

• How long is cash tied up? —
  Not enough data
  What this means

  The filing data didn't include the inputs for this check.

Is it a good business?

• Return on invested capital 2%
  Below average through the cycle
  5-yr median, range -53%–6%; 6% latest = NOPAT $47M ÷ invested capital $843M
  Industry peers: median 3%
  What this means

  The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 5 years (it ran 6% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.

• Owner-earnings margin 20%
  High through the cycle
  8-yr median margin, range 18%–23%; latest $164M = operating cash $168M − maintenance capex $4M
  Industry peers: median 15%
  What this means

  What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 21% of revenue this year, a 20% median across 8 years. Treating stock comp as the real expense it is (less $77M of SBC) leaves $88M.

• Are earnings backed by cash? 5.52×
  Cash-backed
  Cash from ops $168M ÷ net income $30M

  In the filing’s words The filing leans on adjusted, non-GAAP earnings, but the GAAP profit is itself cash-backed — the adjustments are not papering over a cash shortfall here.

  What this means

  How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

• Where do the earnings go? 132%
  Returned more than it generated
  Dividends + buybacks $216M ÷ Owner Earnings $164M — this fiscal year
  What this means

  The company returned more than it generated: against $164M of Owner Earnings, $216M (132%) went back to shareholders, $0 dividends, $216M buybacks — the excess came from the balance sheet or borrowing, not the year's operations. Net of $77M stock comp, the real buyback was about $140M. Sustained, that pattern draws down cash or adds debt; the net-debt line above shows where it stands. This year's proportion is 132%; across the record (2018–2025) it is 186%, the capital-allocation section below.

• Investing or harvesting? 0.04×
  Harvesting
  Capex $4M ÷ depreciation & amortization as filed $85M
  What this means

  Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

The promise and the pay packet

• What does winning a customer cost? 42%
  Heavy selling cost
  Selling and marketing $332M ÷ revenue $797M
  What this means

  Sales and marketing as a share of revenue, kept apart from administrative overhead because it answers a different question: how much a business must spend to win the next customer. A company whose product pulls customers in spends little here and keeps the difference; one that must buy its growth is running to stand still, and the spending has to keep rising for revenue to keep rising. Read it beside the growth rate, not alone.

• Is the buyback buying ownership, or mopping up? 9.6%
  The count is genuinely shrinking
  Stock compensation $77M (fiscal 2025), 9.6% of revenue · repurchases $216M · diluted shares -13.5% since 2022
  What this means

  Stock handed to employees is a real cost paid in the owner's own currency: it is charged against profit, but the shares it creates are permanent. Many companies repurchase stock at the same time, which looks like a return of capital and often is not — if the count barely moves, the cash merely cancelled the pay packet and bought the owner nothing. The three states worth telling apart are a count genuinely shrinking, a count standing still despite large repurchases, and a count rising because the issuance was never offset at all.

Graham’s defensive tests · 1 of 5 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

• Adequate size Miss
  Revenue ≥ $2B · $797M
  What this means

  Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.

• Strong liquidity Pass
  Current ratio ≥ 2× · 2.61×
  What this means

  Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.

• Conservative debt Near
  Debt ≤ working capital · $488M vs $397M WC
  What this means

  Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.

• Earnings stability Miss
  A profit every year (8-yr record) · 4 loss years
  What this means

  Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.

• Dividend record Miss
  Uninterrupted dividends · 1 of 8 yrs
  What this means

  An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.

• Earnings growth —
  Earnings +33% over the record · —
  What this means

  Earnings were negative early in the record, a growth rate isn't meaningful.

• Moderate price —
  P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
  What this means

  Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $0.04/share (latest year $0.09), the averaged base the calculator's gate runs on, and book value is $1.81/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2018–2025

Whether the record’s returns held, and what the capital reinvested earned.

• Profitable years 4 of 8
  What this means

  Lost money in 4 year(s), look at what happened there before trusting the average.

• Return on capital ≥ 15% 0 of 6 yrs
  What this means

  A moat shows up as a high return on invested capital that holds year after year, not one good vintage.

• Operating margin 6% → 5% (3-yr avg ends)

  In the filing’s words The filing attributes gains to higher prices, but the margin in the record has not followed — the claim outruns the result here.

  What this means

  Through the cycle the operating margin held roughly steady — about 6% early, 5% lately, median 2%.

• Reinvestment, incremental ROIC 15%
  What this means

  Every extra dollar the business reinvested came back at a high incremental return — the lens GBM read for a moat that reinvests rather than merely harvests. The record and the 10-K are where you check whether the rate holds.

• Owner earnings growth +16%/yr
  What this means

  Owner earnings grew about 16% a year over the record.

• Worst year 2020 · −50.1% op. margin
  What this means

  Operations went underwater in 2020, understand why before trusting the good years.

• Dividend record paid
  What this means

  Paid a dividend in 1 of the years on record.