The competitive landscape for online pharmacies in Germany has intensified dramatically. In a move that directly targets the sector leader, the drugstore behemoth dm has now entered the fray. As of today, the retailer is shipping over-the-counter (OTC) medicines from the Czech Republic directly to German customers. For Redcare Pharmacy, this aggressive expansion represents a significant challenge to its vital core business, arriving during an already turbulent period for the company.
Share Price Reflects Mounting Investor Anxiety
Market sentiment has turned decidedly nervous in response to this new competitive threat. Redcare’s equity has already suffered substantial losses this year. Currently trading around 62 euros, the shares are positioned far below their 52-week high of over 148 euros.
Technical analysis underscores the prevailing skepticism among investors. The current share price sits nearly 58% below its annual peak and remains significantly under its 200-day moving average of 93.63 euros. This pricing action suggests the market is factoring in considerable risk, anticipating that dm’s market entry could trigger a price war and subsequently compress profit margins across the industry.
A Formidable New Rival Enters the Arena
According to reports, dm initiated its mail-order service today. This strategic maneuver is precisely aimed at a key vulnerability for established online pharmacies: the lucrative OTC segment. While Redcare is experiencing robust growth in prescription medicines, fueled by the adoption of digital prescriptions, non-prescription products continue to be a major revenue driver.
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The new competitor brings considerable advantages to the battle. dm possesses a vast existing customer base, high brand trust within the health and wellness sector, and a network of approximately 2,000 physical stores across Germany. These brick-and-mortar locations offer potential for integrated cross-channel retail strategies. Notably, dm’s decision to utilize a logistics hub in the Czech Republic for distribution mirrors the very operational model Redcare itself has employed for its own expansions, most recently with a new online pharmacy launch in Austria.
Operational Performance Contrasts with Market Sentiment
Despite the pronounced weakness in its share price, Redcare’s underlying business metrics do not signal a crisis. The company recently reported revenue growth exceeding 25%. For the third quarter, it posted an adjusted EBITDA margin of 2.4%. Furthermore, management has been strengthened with the appointment of Hendrik Krampe as the new Chief Financial Officer, effective December 1. His prior leadership experience at Amazon and eBay is expected to guide the firm through these increasingly choppy waters.
Analysts, however, are divided on the severity of the threat. Opinions range from the Deutsche Bank’s bullish price target of 214 euros, which suggests substantial upside potential, to the more cautious stance of UBS, with a target of 74 euros. This wide discrepancy highlights the current difficulty in quantifying the precise impact of the new competitive pressure.
The Path Forward
In the near term, a critical test will be whether the stock can establish a support level around the 60-euro mark. Fundamental clarity is unlikely to emerge before March 3, 2026. On that date, Redcare is scheduled to release its fourth-quarter results, which must demonstrate that its growth targets remain achievable despite the formidable new challenge posed by dm.
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