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Stock Analysis & ValuationDocMorris AG (ROSE.SW)

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CHF35.02
Sector Valuation Confidence Level
High
Valuation methodValue, CHFUpside, %
Artificial intelligence (AI)36.665
Intrinsic value (DCF)8.15-77
Graham-Dodd Methodn/a
Graham Formulan/a

Strategic Investment Analysis

Company Overview

DocMorris AG (ROSE.SW) is a leading European e-commerce pharmacy and wholesale distributor of medical and pharmaceutical products, operating under the Zur Rose and DocMorris brands. Headquartered in Frauenfeld, Switzerland, the company serves Germany, Switzerland, and other European markets with a comprehensive portfolio that includes consumer health, beauty, and personal care products. DocMorris AG also provides medicines management services and operates stationary pharmacy shops, catering to physicians, online mail-order pharmacies, and private individuals. Founded in 1993, the company has evolved into a key player in the digital healthcare space, leveraging its strong e-commerce platform to enhance accessibility and convenience for customers. With a market capitalization of approximately CHF 404 million, DocMorris AG is positioned in the competitive Medical - Pharmaceuticals sector, focusing on innovation and efficiency in pharmaceutical distribution. Despite recent financial challenges, the company continues to expand its footprint in Europe's growing digital health market.

Investment Summary

DocMorris AG presents a mixed investment profile. The company operates in the rapidly growing e-pharmacy sector, benefiting from increasing digitalization in healthcare and consumer demand for convenient pharmaceutical services. However, its financial performance has been weak, with a net loss of CHF 97.3 million in the latest fiscal year and negative operating cash flow. The high beta of 1.404 indicates significant volatility relative to the market, which may deter risk-averse investors. While the company has a solid cash position (CHF 95.4 million), its total debt of CHF 312.2 million raises concerns about financial stability. Investors should weigh the potential of Europe's expanding digital pharmacy market against DocMorris AG's current profitability challenges and competitive pressures.

Competitive Analysis

DocMorris AG competes in the European e-pharmacy and pharmaceutical wholesale market, where it faces intense competition from both traditional pharmacies and digital-first players. The company's competitive advantage lies in its established brand recognition (Zur Rose and DocMorris), integrated e-commerce platform, and multi-channel distribution strategy, which includes stationary pharmacies. However, its profitability struggles and negative EPS (-8.26) highlight operational inefficiencies compared to more streamlined competitors. The company's wholesale segment provides a steady revenue stream but is subject to margin pressures from larger pharmaceutical distributors. In the online pharmacy space, DocMorris must contend with agile competitors that offer superior customer experience and faster delivery times. The company's ability to scale its medicines management services could differentiate it in the long term, but execution risks remain high given its current financial constraints.

Major Competitors

  • Shop Apotheke Europe NV (SHL.DE): Shop Apotheke Europe is a major online pharmacy in Europe, with strong operations in Germany and the Netherlands. It competes directly with DocMorris in the e-pharmacy space, offering competitive pricing and a user-friendly platform. However, it has also faced profitability challenges, though its growth trajectory has been more stable compared to DocMorris. Its focus on prescription medications gives it an edge in certain markets.
  • A.S. Watson Group (Health & Beauty Europe) (APAM.AS): A.S. Watson operates a broad health and beauty retail network, including online pharmacies. Its extensive physical store presence provides a competitive omnichannel advantage over DocMorris. However, its e-commerce platform is less specialized in pharmaceuticals, which may limit its appeal to customers seeking dedicated pharmacy services.
  • Bayer AG (BAYN.DE): Bayer is a pharmaceutical giant with a strong OTC and prescription drug portfolio. While not a direct competitor in e-pharmacy, its consumer health division competes with DocMorris in product offerings. Bayer's vast R&D capabilities and brand strength make it a formidable player, though it lacks DocMorris's specialized e-pharmacy focus.
  • Novartis AG (NOVN.SW): Novartis is a global pharmaceutical leader with a significant presence in Europe. Its Sandoz generics division competes indirectly with DocMorris's wholesale business. Novartis's scale and supply chain efficiency give it pricing power, but it does not operate in the e-pharmacy retail space, leaving room for DocMorris to capture niche demand.
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