Critical Review: DXC Technology (NYSE:DXC) and GoodRx (NASDAQ:GDRX)

GoodRx (NASDAQ:GDRX) and DXC Technology (NYSE:DXC) are both medical companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, earnings, risk, profitability, analyst recommendations, institutional ownership and valuation.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
GoodRx	-2.05%	5.35%	2.51%
DXC Technology	0.18%	20.42%	4.69%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for GoodRx and DXC Technology, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GoodRx	1	5	9	1	2.63
DXC Technology	2	7	0	0	1.78

GoodRx presently has a consensus price target of $8.60, suggesting a potential upside of 82.59%. DXC Technology has a consensus price target of $20.89, suggesting a potential downside of 2.66%. Given GoodRx’s stronger consensus rating and higher possible upside, equities research analysts plainly believe GoodRx is more favorable than DXC Technology.

Volatility and Risk

GoodRx has a beta of 1.29, suggesting that its share price is 29% more volatile than the S&P 500. Comparatively, DXC Technology has a beta of 1.65, suggesting that its share price is 65% more volatile than the S&P 500.

Institutional & Insider Ownership

63.8% of GoodRx shares are owned by institutional investors. Comparatively, 96.2% of DXC Technology shares are owned by institutional investors. 4.2% of GoodRx shares are owned by company insiders. Comparatively, 0.5% of DXC Technology shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares GoodRx and DXC Technology”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GoodRx	$790.39 million	2.27	-$8.87 million	($0.03)	-157.00
DXC Technology	$13.67 billion	0.28	$91.00 million	$0.08	268.28

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

Summary

DXC Technology beats GoodRx on 9 of the 15 factors compared between the two stocks.

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.

About DXC Technology

DXC Technology Company, together with its subsidiaries, provides information technology services and solutions in the United States, the United Kingdom, rest of Europe, Australia, and internationally. It operates in two segments, Global Business Services (GBS) and Global Infrastructure Services (GIS). The GBS segment offers a portfolio of analytics services and extensive partner ecosystem that help its customers to gain insights, automate operations, and accelerate their transformation journeys; and software engineering, consulting, and data analytics solutions, which enable businesses to run and manage their mission-critical functions, transform their operations, and develop new ways of doing business. This segment also simplifies, modernize, and accelerate mission-critical applications that support business agility and growth through applications services; provides proprietary modular insurance software and platforms; and operates a wide spectrum of insurance business process services, as well as helps to operate and improve bank cards, payment and lending process and operations, and customer experiences. The GIS segment offers security services, such as IT security, operations and culture for migrating to the cloud, protecting data with a zero-trust strategy, and manage a security operation center; and cloud infrastructure and IT outsourcing services. This segment also delivers a consumer-like experience, centralize IT management, and support services, as well as improves the total cost of ownership; and orchestrates hybrid cloud and multicloud environments. The company markets and sells its products through direct sales force to commercial businesses and public sector enterprises. DXC Technology Company was founded in 1959 and is headquartered in Ashburn, Virginia.