Optimizer Corporation

OPRX Details

OptimizeRx Corporation (NYSE: OPRX) is a digital health firm dedicated to providing patients and providers with life sciences support. It promotes affordability and makes it easier for patients to stick to their treatment regimens.

Latest News:

• Wins Big Innovation Award: On January 18, 2022, the company announced that it had won a significant innovation award for AI-Driven Therapy Initiation and Persistence in the year 2022.
• Dragonfly and Keystone’s Agreement: PM360 named OptimizeRx's Evidence-Based Physician Engagement Solution has considered one of the most innovative products in the year 2021.
• Increase in OptimizeRx Solution: The company has seen an increase in optimizeRx solution to 182 from 140 in the past six months.

Q3FY21 Results:

• Solid Top Line Growth: The total revenue has been recorded for Q3FY21 to USD 16.1 million, up by 53 % from USD 10.5 million in Q3FY20, resulting from an increase in all its solutions.

Source: Company Website 

• Robust Cash Flow: The company has increased cash and cash equivalents by USD 85.05 million in Q3FY21 compared to USD 10.52 million in Q3FY20, which indicates massive investment in opportunities.
• Turned losses into Profits: The company has posted a net income of USD 39,894 in Q3FY21 compared to a loss of USD 2,82,894 in Q3FY20.

Key Risks:

• Concentrated Group of Customers: The company is majorly dependent on around 50 customers, primarily large pharmaceutical manufacturers, creating a risk of successful execution of business plans. Other hazards include obtaining customers, failure to support technology, contractual obligations, and regulatory compliance risk.

Outlook:

The Group posted record revenue and ample cash as of September 30, 2021. The company has won several awards and expanded its operations team for growth. Next, the company has established an exclusive partnership with Demand base to provide the industry's most powerful account-based experiences solution.

Valuation Methodology: EV/Sales Multiple Based Relative Valuation

Analysis by Kalkine Group

Technical Summary Analysis:

OPRX Daily Technical Chart (Source: REFINITIV)

Stock Recommendation:

The company reported decent performance in the quarter just gone by, with record growth in revenue, robust cash and maintained balance sheet strength as well. However, higher dependency on few sets of customers is the key risk associated to the investment.  OPRX’s share price has decreased by 53.65% in the past three months and is currently leaning towards the 52-week low of USD 39.06.

We have valued the stock using the EV / Sales multiple based relative valuation methodology and arrived at a target price of USD 50.16 as of January 25, 2022.

Considering the major correction in the stock price, growing business model, strong revenue track record, risk associated, and valuation done we recommend a “Speculative Buy" rating on the stock at the Current Market Price of USD 41.74 at 01: 48 PM, January 25, 2022.

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.

* Depending on risk tolerance, investors may consider unwinding their positions in an individual stock once the estimated target price is reached.