Trxade Health Inc. (NASDAQ: MEDS) Q3 2023 Research Summary

The company made its stock market debut in February 2020 and is listed on the Nasdaq stock market under the symbol MEDS. The core business remains focused on digitalizing the retail pharmacy experience and optimizing drug procurement. The internet-based platform brings together pharmacies and suppliers of pharmaceuticals while allowing customers to compare prices and order products.  

Overview

Trxade did a commendable job during the pandemic by making remote healthcare delivery available to patients through its digital healthcare arm, thereby contributing to the COVID-19 care program. The company’s unique business model enables it to adapt to changing market conditions.

Trxade’s user base has expanded consistently – currently, the number of registered users is around 14,500 – as the company continues to grow its pharmacy/clinic footprint. The global online pharmacy market is expected to grow at a compound annual rate of more than 12% and reach a volume of above $80 billion by 2028. Being a key player in the e-pharma space, Trxade is well-positioned to tap into that opportunity. It completed the acquisition of Superlatus in July 2023.

Subsidiaries

The company operates through the following subsidiaries. All businesses, except SOSRx LLC., are 100% owned.

● Trxade, Inc.
● Integra Pharma Solutions, Inc.
● Community Specialty Pharmacy
● Alliance Pharma Solutions, LLC
● Bonum Health, Inc.
● Bonum Health, LLC
● MedCheks, LLC
● SOSRx LLC

Recent Developments

Last month, Superlatus signed an agreement to acquire the assets of Spero Foods Incorporated, a plant-based tech company specializing in alternative dairy and egg replacements, to expand its portfolio of CPG brands. More recently, a Superlatus subsidiary entered into a supplier agreement with Rainforest Distribution Corporation, a leading consumer packaged goods distributor serving retailers in the Mid-Atlantic, Midwest, Northeast and North Atlantic regions.

Important Numbers

In the second quarter, the results for which were published a few months ago, Trxade’s revenues declined 31% from last year to $2.25 million, mainly reflecting weak performance by the Integra subsidiary. Net loss attributable to the company was $1.97 million or $2.90 per share in Q2, compared to a loss of $1.08 million or $1.99 per share in the same period of last year. The Trxade platform increased its registered users by 1,149 or 8% as of June 30, 2023, compared to the corresponding period of 2022.

At the Bourses

Trxade’s stock made strong gains a couple of months ago — which was marked by one of the biggest single-day growths — mainly reflecting positive sentiment that followed the recent M&A deals. Though it pared a part of those gains later, the stock continues to maintain an uptrend. Based on the last closing price (November 09, 2023), MEDS is up 26% since the beginning of 2023.

Considering the company’s aggressive growth initiatives, it is likely to elicit strong investor interest going forward, which will have a positive effect on the stock.  

SWOT Analysis

Strengths: The primary strength of Trxade is its advanced web-based platform that enables healthcare buyers and sellers of pharmaceuticals to meet and transact in a convenient manner. Recent growth initiatives including the Superlatus merger are expected to bolster the company’s top-line performance. At the same time, the core business continues to gain traction even as the subscriber base keeps growing.   

Weaknesses: The company is yet to generate profit consistently, which restricts its ability to invest in the business. A lack of coordination among stakeholders in the retail pharmacy market and the absence of price transparency remain a hassle when it comes to maintaining efficiency.

Opportunities: The ongoing digital transformation and shift to technology-enabled healthcare can increase the demand for the services being offered by the company. There is a growing interest among vendors to tie up with Trxade to provide value to independent pharmacies through competitive pricing.

Threats: The healthcare industry is undergoing a rapid transformation including widespread consolidation, a trend that would require companies like Trxade to revisit their business strategies.