Rochester, New York – OptimizeRx Corporation (NASDAQ: OPRX) is experiencing exponential growth in revenue, leading to historically low valuation multiples. Despite announcing strong guidance, the market response has been subdued. Analysts anticipate a potential 30% undervaluation compared to peers and industry standards.
OptimizeRx focuses on enhancing drug distributors’ reach to physicians and patients through an AI-powered platform known as Dynamic Audience Activation Platform (DAAP). Their services include patient discovery and script optimization, aiming to increase brand awareness and drive script growth. The integration of various channels and services in their suite provides synergies in data collection and distribution, leading to an average deal value of $1.5 million, expected to rise with cross-selling opportunities.
The company has achieved a 90% coverage of top pharma manufacturers, with 60% of revenue stemming from these clients. Strong revenue retention at 93% and growing quarter over quarter signals industry confidence and high returns on investment. Despite previous peak valuations in 2020-2021, with stock prices reaching $90 and EV/Sales at 25x, OptimizeRx now trades at $12 and EV/Sales at 2.5, showcasing a significant decline.
The acquisition of Medicx, an omnichannel marketing and analytics provider, is expected to boost revenue significantly in 2024. With Medicx being acquired at around 3x revenues, below the sector median of 3.6x, synergies are anticipated to drive growth and improve offerings to existing customers. However, integration risks and competitive threats pose challenges, requiring careful management and strategic decisions.
Looking ahead, analysts believe the pro-forma company resulting from the acquisition will be undervalued, presenting opportunities for organic growth. Despite appearing expensive relative to the sector in EV/EBITDA terms, factors like new guidance and post-acquisition capital structure must be considered. Adjusting for OPRX’s superior performance compared to sector averages, a potential re-rate towards industry peers like Augmedix, Inc., could lead to a 30% upside in stock price.
In conclusion, OptimizeRx stands as a disruptor in the healthcare industry, leveraging advanced technologies for patient targeting. With a strong product, proven by key performance indicators and revenue growth, the market may be overlooking the company’s true value, hinting at a promising future in 2024.
