Redcare Pharmacy: Can Growth Justify the Deepening Investor Skepticism?

Redcare Pharmacy finds itself navigating a severe crisis of confidence among market participants. Despite the online pharmacy continuing to post robust expansion, shareholders are growing increasingly anxious about its path to profitability, relentlessly selling off the stock. This raises a critical question for the market: is the current downward spiral an overreaction or a fundamentally justified correction?

The core of the dilemma was laid bare in the quarterly figures released on October 29, 2025. Revenue demonstrated significant strength, climbing 25% to reach €719 million. However, profitability remains the primary concern. The adjusted EBITDA margin of just 2.4% underscores the immense cost of the battle for market share in the rapidly expanding e-prescription sector. Even an 82% surge in the German prescription business failed to reassure the investment community.

Compounding these financial concerns is a recent leadership shake-up. The unexpected departure of CFO Jasper Eenhorst at the end of September injected further uncertainty into the market and amplified doubts regarding the company's strategic direction.

A Market Divided: Analyst Perspectives

As the share price continues its descent, the response from financial analysts presents a fascinating split. Following the earnings release, both Deutsche Bank Research and Baader Bank reaffirmed their "Buy" recommendations. This optimism, however, is not universal. UBS, for instance, maintains its "Sell" advice. This clear division highlights the market's struggle to value a company so heavily prioritized for expansion over immediate earnings.

Should investors sell immediately? Or is it worth buying Redcare Pharmacy?

The entire online pharmacy industry is at a pivotal juncture. The nationwide rollout of e-prescriptions in Germany offers substantial long-term potential, but the fight for customer acquisition is capital-intensive. Redcare is making substantial investments in marketing to cement its position as a market leader—a strategy that inevitably pressures short-term earnings with the aim of securing long-term revenue streams.

Searching for a Catalyst

With the latest quarterly results now fully absorbed by the market, a clear short-term catalyst is absent. The next significant milestone will be the full-year 2025 results. At that time, the market's focus will not only be on continued top-line growth but, more critically, on any tangible signs of a turnaround in profitability.

From a technical analysis standpoint, the stock is entrenched in a definitive downtrend. Having breached several key support levels, it is now approaching its annual lows. Trading activity in the coming days will be crucial in determining whether a price floor can be established or if the negative momentum will persist. The ultimate question remains: will this expensive growth-at-all-costs strategy eventually yield returns, or will Redcare continue to burn through millions in its relentless pursuit of market share?