Stock Analysis & Valuation Redcare Pharmacy N.V. (RDC.DE)

• Previous Close: €62.55
• Sector Valuation Confidence Level: High

Valuation method	Value, €	Upside, %
Artificial intelligence (AI)	114.89	84
Intrinsic value (DCF)	2243.79	3487
Graham-Dodd Method		n/a
Graham Formula		n/a

Strategic Investment Analysis

Company Overview

Redcare Pharmacy NV (formerly Shop Apotheke Europe N.V.) is a leading European online pharmacy operating in Germany, Austria, Switzerland, France, Belgium, Italy, and the Netherlands. The company specializes in the digital distribution of prescription medications, over-the-counter drugs, and pharmacy-related beauty and personal care products, along with food supplements. Founded in 2001 and headquartered in Sevenum, the Netherlands, Redcare Pharmacy has established itself as a key player in the e-pharmacy sector, leveraging digital transformation in healthcare. The company serves a growing demand for convenient, online pharmaceutical services, benefiting from increasing digital adoption and regulatory support for online pharmacies in Europe. With a market cap of approximately €2.55 billion, Redcare Pharmacy is positioned in the competitive but high-growth Medical - Pharmaceuticals sector, catering to both B2C and B2B segments. Its rebranding in 2023 reflects a strategic shift toward a more integrated healthcare platform.

Investment Summary

Redcare Pharmacy NV presents a high-growth opportunity in the expanding European e-pharmacy market, supported by increasing digital healthcare adoption and regulatory tailwinds. However, the company's negative net income (-€45.46M in the latest fiscal year) and diluted EPS (-€2.27) highlight profitability challenges amid aggressive expansion and competitive pressures. The company's operating cash flow (€22.13M) and solid cash position (€96.89M) provide some financial flexibility, but its high beta (1.171) suggests elevated volatility risk. Investors should weigh the long-term growth potential against near-term profitability concerns and competitive dynamics in the fragmented European online pharmacy sector.

Competitive Analysis

Redcare Pharmacy NV competes in a rapidly evolving e-pharmacy market characterized by regulatory complexity and increasing digital adoption. Its competitive advantage lies in its pan-European footprint, strong brand recognition (especially in Germany and the Netherlands), and integrated platform offering prescription and OTC medications alongside wellness products. The company benefits from economies of scale in logistics and supplier relationships, though it faces margin pressures due to price competition and regulatory constraints on online pharmacy margins in some markets. Unlike traditional brick-and-mortar pharmacies, Redcare leverages a purely digital model, reducing overhead costs but requiring significant investment in technology and customer acquisition. Its main challenges include navigating diverse national healthcare regulations and competing with both established pharmacy chains expanding online (e.g., DocMorris) and pure-play e-pharmacies with niche focuses. The 2023 rebranding to Redcare Pharmacy signals a strategic pivot toward a broader healthcare ecosystem, potentially differentiating it from transactional competitors.

Major Competitors

• DocMorris AG (DOCM.DE): DocMorris is a major competitor with a strong presence in Germany and Switzerland, operating both online and hybrid (online + physical) pharmacy models. Its partnership with the German insurance group SHL provides a reimbursement advantage, but its profitability has been inconsistent. Compared to Redcare, DocMorris has deeper integration with insurance systems but faces higher operational costs due to its hybrid approach.
• A.S. Watson Group (via Kruidvat) (APAM.AS): Kruidvat, part of A.S. Watson, is a dominant player in the Benelux region with a strong offline retail presence expanding online. It benefits from brand loyalty and a broad product range but lacks Redcare’s specialized focus on pharmaceuticals. Its parent company’s resources provide scale advantages, but its online pharmacy segment is less developed than Redcare’s.
• Zalando SE (via Zalando Healthcare) (ZAL.DE): Zalando’s healthcare division competes in the wellness and OTC segments with superior logistics and tech capabilities. However, it lacks Redcare’s expertise in prescription medications and regulatory approvals. Zalando’s strength in customer experience and data analytics poses a long-term threat if it expands deeper into pharmaceuticals.
• Amazon Pharmacy (AMZN): Amazon’s limited European pharmacy presence (currently UK-focused) represents a potential disruptor with its vast logistics network and Prime integration. However, regulatory barriers and Redcare’s first-mover advantage in key markets like Germany provide some insulation. Amazon’s pricing power is a long-term risk.