LearningMachine Posted September 4, 2020 Share Posted September 4, 2020 I'd like some help of our collective wisdom to figure out the probability of profitability and valuation for NowRx. Here are some links for more info: https://www.seedinvest.com/nowrx/series.b.2 https://sec.report/Document/1702206/000114420419045501/tv529845_253g2.htm Pros: Decent Customer satisfaction: They are claiming decent NPS. I haven't had first hand experience with their service but can relate to pain of picking up medication in person during Covid situation. Low Real estate overhead: They are claiming lower real-estate overhead, but I'm wondering if Walgreens and CVS are able to achieve effectively no real-estate overhead costs for pharmacy part of their store through sales of higher-margin merchandise to heavy foot traffic. Cons: Higher Operating Expenditures: Their Operating Expenditures look high given their claims of low OpEx. I'm wondering if part of it is because of the costs of drivers to ship, which Walgreens called out in a recent quarterly call as one of the reasons they prefer customers to come to their store. Will they ever become decently profitable without diluting again and again? Lower Gross Margins: Their gross margins were lower than other pharmacies in one of the docs I came across. They claimed it is because they sell more branded medication. I also wonder if their little negotiation power won't be able to compete with higher-share retailers like Walgreens and CVS in negotiating lower prices on both branded and generic medications. Continuing Losses: The company has been making losses each year and projected to continue to make losses for now. Doesn't surprise me given high operating expenditures and lower margins above. Strong Competition: Can Amazon just kill NowRx along with killing Walgreens and CVS by introducing Same-day 2-hour Prime shipment from their PillPack acquisition? Amazon has already started getting licenses in each state. Now, they just need to have a pharmacist in each MSA just like NowRx. Capsule is also getting higher funding already, and planning to grow nationwide. High Executive compensation from raises: Is it to too early for exec team to be taking high compensation from raises? Link to comment Share on other sites More sharing options...
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