Redcare Pharmacy’s shareholders have ushered in a new era of leadership, confirming a sweeping boardroom reshuffle at the recent annual meeting. Three new faces—Anja Hendel, Max Müller, and Peter Schmid von Linstow—joined the supervisory board, replacing members who had served since the company’s IPO. This fresh oversight team will immediately grapple with a central paradox: blistering sales growth paired with severe pressure on profitability.
Operational momentum is undeniable. Preliminary first-quarter figures show group revenue surged 18.3% to €848 million, far exceeding the company’s own annual growth target of 13-15%. The engine of this expansion is the prescription (Rx) business, where sales jumped 35% overall and soared 55% in Germany alone to €168 million. The online pharmacy now counts over 14 million active customers.
Yet this growth comes at a steep cost. Management has declared 2024 a year of “maximum investment,” centered on a new logistics hub in Pilsen, Czech Republic, designed to boost annual capacity by 15 million packages. These heavy capital expenditures have forced a significant revision of financial targets. The medium-term margin goal has been slashed from over 8% to more than 5%, with Redcare aiming for an adjusted EBITDA margin of at least 2.5% by 2026.
The newly confirmed CFO, Hendrik Krampe, brings relevant scale-up expertise to this challenge. With over three decades of experience, including an eleven-year stint at Amazon’s European headquarters where he spent eight years as Finance Director for the European marketplace business, his background in scaling online platforms is seen as a precise fit for Redcare’s current phase.
Should investors sell immediately? Or is it worth buying Redcare Pharmacy?
Investors remain skeptical, creating a stark disconnect between business performance and market valuation. The stock, currently trading at €48.62, is down nearly 28% since the start of the year despite a roughly 60% recovery from its 52-week low in late March. The Relative Strength Index (RSI) reading of 14.7 indicates the shares are deeply oversold. Analyst opinions vary widely, with Deutsche Bank maintaining a €99 price target while Jefferies sees fair value at €150.
Potential regulatory tailwinds from Berlin could eventually shift the calculus. A government-appointed health commission has proposed raising patient co-payments for prescription medications from the current €5-€10 range to €7.50-€15. Analyst Felix Dennl of Bankhaus Metzler argues that higher out-of-pocket costs would drive price-sensitive patients toward cheaper channels, disproportionately benefiting online pharmacies. Redcare, which already commands 67% of the German online prescription market following rival Rossmann’s explicit decision not to enter the Rx segment, stands to gain.
The first major test for the new leadership arrives on May 6th, when Redcare publishes its full first-quarter interim report. This disclosure will be scrutinized for evidence that the explosive growth in the core prescription segment can ultimately translate into sustainable profits, justifying the current period of intense investment and determining whether the recent stock recovery is built on solid foundations.
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