Redcare Pharmacy (RDC) AI Stock Analysis

• Market Cap: €1.53B
• Dividend Yield: N/A
• Average Volume (3M): 126.86K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.72
• Revenue Growth: 25.78%
• EPS Growth: -266.48%
• Country: DE
• Employees: 1,827
• Sector: Healthcare
• Sector Strength: 51
• Industry: Medical - Pharmaceuticals
• EPS (TTM): 0.43
• Shares Outstanding: 20,578,390
• 10 Day Avg. Volume: 179,154
• 30 Day Avg. Volume: 126,864
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €163.83
• Price Target Upside: 125.97% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

• Rating: 43 Neutral
• Price Target: €79.00 ▲(8.97% Upside)

Redcare Pharmacy's stock is currently facing significant challenges. The primary concerns are its negative profitability and bearish technical indicators. While the company benefits from low financial leverage, its valuation is unattractive due to ongoing losses and no dividend yield. Improvement in operational efficiency and profitability is crucial for a better outlook.

Positive Factors

Financial Performance

A 15% beat on adj. EBITDA as the Q2 margin surprises positively with 2.6%, coming out above the full year target corridor of 2.0-2.5%.

Market Share

The company's market share increased to 0.87%.

Sales Growth

Sales were up 28% to €717 million, driven by growth in the OTC segment and strong German Rx sales.

Negative Factors

Profitability

The intensified marketing efforts for Rx also came at a cost of slightly lower profitability in FY24.

Sales Trajectory

German Rx sales showed a sequential slowdown, with only €6m incremental sales.

Top Line Momentum

Slowing top line momentum coupled with lower margins due to ongoing growth investments, especially in marketing, would be taken negatively.

Redcare Pharmacy Business Overview & Revenue Model

Company Description

Redcare Pharmacy NV owns and operates online pharmacies in Germany, Austria, Switzerland, France, Belgium, Italy, and the Netherlands. It provides prescription medications, over-the-counter medications, and pharmacy-related beauty and personal care products, as well as food supplements. The company was formerly known as Shop Apotheke Europe N.V. and changed its name to Redcare Pharmacy NV in June 2023. The company was founded in 2001 and is headquartered in Sevenum, the Netherlands.

How the Company Makes Money

Redcare Pharmacy generates revenue primarily through the sale of prescription medications and over-the-counter products. The company operates a retail model where customers purchase these products directly from their stores or through an online platform. Key revenue streams include prescription sales, which are often reimbursed by insurance providers, as well as sales of health supplements, personal care items, and wellness products. Additionally, RDC may engage in partnerships with healthcare providers and insurance companies to facilitate medication management services and health programs, further enhancing its revenue opportunities. Seasonal promotions, loyalty programs, and community health initiatives also contribute to increased customer footfall and sales.

Redcare Pharmacy Financial Statement Overview

Summary

Redcare Pharmacy shows revenue growth but struggles with profitability and cash flow management. The company has low financial leverage, providing stability, but needs to improve operational efficiency to enhance margins and cash flow conversion.

Income Statement

Redcare Pharmacy shows a consistent revenue growth trajectory, with a TTM growth rate of 5.88%. However, profitability remains a concern as evidenced by negative net profit margins and EBIT margins, indicating ongoing operational challenges. The gross profit margin is stable but not sufficient to offset other expenses, leading to overall losses.

Balance Sheet

The company maintains a strong equity position with a low debt-to-equity ratio of 0.002 in the TTM period, suggesting low financial leverage. However, the negative return on equity indicates that the company is not generating sufficient returns on its equity base, reflecting inefficiencies in utilizing shareholder funds.

Cash Flow

Operating cash flow has improved, but free cash flow remains negative, indicating cash flow challenges. The significant free cash flow growth in the TTM period is a positive sign, yet the negative free cash flow to net income ratio suggests that the company is not converting its earnings into cash effectively.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.68B	2.37B	1.80B	1.20B	1.06B	968.06M
Gross Profit	619.80M	545.78M	440.38M	331.79M	266.53M	219.53M
EBITDA	37.37M	28.03M	58.18M	-30.64M	-37.41M	14.66M
Net Income	-34.86M	-45.46M	-12.04M	-77.65M	-74.19M	-16.77M
Balance Sheet
Total Assets	1.24B	1.00B	1.02B	729.47M	783.08M	536.91M
Cash, Cash Equivalents and Short-Term Investments	315.71M	177.56M	204.16M	184.00M	283.46M	127.89M
Total Debt	1.06M	247.38M	244.84M	255.19M	236.43M	38.23M
Total Liabilities	713.50M	493.31M	469.56M	374.84M	367.66M	111.77M
Stockholders Equity	508.70M	483.98M	522.19M	354.63M	415.41M	425.14M
Cash Flow
Free Cash Flow	-25.52M	13.38M	23.23M	-82.64M	-31.52M	-35.53M
Operating Cash Flow	43.81M	22.13M	61.46M	-29.11M	11.63M	17.80M
Investing Cash Flow	-178.67M	8.38M	-59.96M	-138.01M	-84.30M	-40.26M
Financing Cash Flow	117.35M	-17.94M	15.05M	-13.52M	229.59M	50.29M

Redcare Pharmacy Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 72.50
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE:RDC, the sentiment is Negative. The current price of 72.5 is below the 20-day moving average (MA) of 87.58, below the 50-day MA of 94.40, and below the 200-day MA of 116.22, indicating a bearish trend. The MACD of -6.31 indicates Positive momentum. The RSI at 22.10 is Positive, neither overbought nor oversold. The STOCH value of 5.83 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DE:RDC.

Redcare Pharmacy Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PSG	75 Outperform	€367.20M	18.26	48.46%	0.17%	13.80%	10.94%
M12	69 Neutral	€249.17M	15.64	14.61%	3.75%	7.23%	58.37%
DMP	62 Neutral	€1.78B	16.57	18.49%	2.73%	3.98%	29.10%
Sector *	51 Neutral	$7.91B	-0.36	-41.71%	2.23%	23.45%	-1.86%
RDC	43 Neutral	€1.53B	―	-7.50%	―	25.78%	-266.48%
0N6Z	―	€1.38B	61.76	-4.72%	―	―	―
MEDOF	―	$442.36M	21.66	3.56%	―	―	―