Redcare Pharmacy Shares Tumble Amid New Competitive Threat

Redcare Pharmacy NL0012044747

Redcare Pharmacy's stock has lost approximately half its value in 2025, a dramatic decline that stands in stark contrast to the double-digit growth rates reported by the company. This divergence is largely attributed to mounting market anxiety over the arrival of a formidable new competitor in its core business segment.

The firm's operational metrics for the first nine months of the year tell a compelling story of expansion. Group revenue advanced by 27 percent to reach 2.15 billion euros. This surge was primarily driven by the German prescription medication business, which alone expanded by more than 80 percent in the third quarter, benefiting from the structural tailwind provided by the digital prescription (E-Rezept) system.

However, this top-line growth has yet to translate into bottom-line profitability. While Redcare Pharmacy managed to narrow its net loss from 46 million euros in the prior year to approximately 10 million euros, it remains in the red. For investors, the combination of strong growth without profits, now coupled with intensifying competition, presents a significant concern.

Key financial figures include:
* A 27 percent increase in revenue to 2.15 billion euros
* German prescription sales rising over 80 percent in Q3
* A net loss of around 10 million euros for the first nine months
* Liquidity in excess of 260 million euros

Market Entry of dm Sends Shockwaves

The catalyst for recent investor nervousness emerged in mid-December when the German drugstore chain dm launched its own online service for prescription medicines. This move represents a direct competitive challenge to Redcare Pharmacy. dm enters the arena with a multi-million customer base and a powerful, established brand—key assets in a market share battle. The stock market's reaction reflected deep apprehension about this altered competitive landscape.

Guidance Held Firm Amid Investor Skepticism

Management has reaffirmed its full-year outlook, forecasting revenue growth of over 25 percent and an adjusted EBITDA margin between 2 and 2.5 percent. This suggests underlying operational stability from the company's perspective.

Analyst sentiment remains cautious. UBS recently upgraded the stock to "Neutral" from a lower rating, attaching a price target of 74 euros. This assessment implies limited downside risk from current levels but also anticipates no swift recovery. The analysts, mirroring the broader market sentiment, are adopting a wait-and-see approach.

The critical question for Redcare Pharmacy is whether it can achieve profitability by 2026 while simultaneously defending its market position against the incursion from dm. The stage is set, but the uncertainty level is pronounced.