A Shift in Sentiment: Short Sellers Retreat from Redcare Pharmacy

Hedge funds cut short bets on Redcare Pharmacy as growth slows and competition intensifies. Stock nears 52-week low after margin target cut.

Despite a prolonged and severe sell-off in its shares, a notable change is emerging among professional investors betting against Redcare Pharmacy. Recent data indicates that institutional short sellers are scaling back their positions, suggesting a potential reassessment of the stock's near-term downside.

According to figures from the analytics firm Hazeltree dated March 11, 2026, hedge funds have reduced their short bets on the online pharmacy by more than ten percent compared to the previous month. This pullback implies that sophisticated market participants now view the potential for further price declines, following the latest annual results and a revised corporate forecast, as increasingly limited.

Record Revenue Overshadowed by Profitability Concerns

The company's 2025 financial performance presented a mixed picture. While total revenue surged by over 24 percent to reach 2.94 billion euros, driven primarily by a near-doubling of German e-prescription business revenue to 503 million euros, investor focus quickly shifted to profitability metrics. The adjusted EBITDA margin did see a modest improvement, rising from 1.4 to 2.0 percent.

However, the guidance for the current year disappointed the market. A projected revenue growth of 13 to 15 percent for 2026, alongside a target margin of at least 2.5 percent, fell short of expectations. More significantly, the company revised its medium-term margin target downward from over eight percent to now more than five percent. Analysts interpret this adjustment as an acknowledgment that rapid expansion in the e-prescription segment demands substantial investment, exerting a greater drag on profitability than previously anticipated.

Intensifying Competitive Pressure

Redcare Pharmacy's challenges are compounded by a shifting competitive landscape. The entry of major drugstore chains into the online space is creating new headwinds. Since the December 2025 launch of "dm-med," the drugstore giant dm has been aggressively moving into the market for over-the-counter medications. Furthermore, competitor Rossmann has confirmed its own plans to enter the online pharmacy sector.

This combination of margin pressure and heightened competition has taken a severe toll on the share price. The stock closed yesterday's session at 41.72 euros, hovering just above the 52-week low established earlier this week. On a monthly basis, the shares have shed approximately 37 percent of their value.

Investors seeking clarity on the efficacy of internal measures to boost profitability will soon have fresh data for assessment. Redcare Pharmacy is scheduled to release its first-quarter 2026 results on May 6, 2026. Until that report, the recent retreat by short sellers stands as one of the few constructive signals for the beleaguered equity.