Redcare Pharmacy's Record Short Interest Exposes a Deep Divide Over the Stock's True Worth

The battle over Redcare Pharmacy's valuation has rarely been more stark. Short sellers have pushed their bets against the stock to an all-time high of 9.88% of shares outstanding, far above the 12-month average of 6.32%, while several analysts see the stock worth more than double its current price. The gap between market pessimism and analyst optimism has seldom yawned wider.

That tension played out in the stock's lackluster close to the week. Shares managed a 2.00% bounce on Friday to 43.96 euros, leaving the week down 1.26% and the month off 8.53%. The intraday low of 42.02 euros on May 28 remains a key floor. On a year-to-date basis, the stock has shed 34.58%, and over the past twelve months the loss has stretched to 62.56%. Technically, the share price sits just 1.84% above its 50-day moving average of 43.17 euros but a daunting 27.80% below the 200-day average of 60.89 euros — a chasm that underscores how far the downtrend still reaches.

Analysts, however, are not on the same page. Deutsche Bank's Jan Koch reiterated a "Buy" rating with a 99-euro target on May 28 after Redcare's management appeared at the dbAccess European Champions Conference in Frankfurt. The team voiced confidence in the full-year outlook, citing second-quarter trends, but offered no new financial data or strategic announcements. At the other extreme, Jefferies sets a target of 150 euros, betting on the e-prescription boom, while UBS pegs fair value at just 74 euros, warning of weakness in the core over-the-counter business. Among nine analysts covering the stock, seven recommend buying and two say hold, but the spread from 74 to 150 euros is unusually wide.

Should investors sell immediately? Or is it worth buying Redcare Pharmacy?

The first-quarter results, released weeks ago, provide ammunition for both camps. Group revenue climbed 18.4% to 849 million euros, with the DACH region up 19% and international operations advancing 16%. The net loss narrowed to 10.5 million euros, and adjusted EBITDA came in at 14.4 million euros, translating to a margin of 1.7%. The growth engine is clearly the German e-prescription business: Rx revenue surged 55%. Non-prescription sales in Germany accelerated from 9% in the first quarter to roughly 11% in April.

The catch is profitability. Redcare's gross margin contracted from 23.3% to 21.0%, dragged down by fierce competition in OTC, a higher mix of lower-margin prescription products, and the Rx bonus program launched in mid-September 2025. The adjusted EBITDA margin of 1.7% still lags the full-year target of at least 2.5%, making that goal a genuine stretch. Liquidity stood at 135 million euros at the end of March after the company bought back 64.5 million euros of convertible bonds during the quarter.

Internationally, the story is one of investment and patience. Redcare operates in seven markets, including France, Belgium, Italy and the Netherlands, and aims for breakeven adjusted EBITDA abroad in 2026 — a target that already reflects a cut in medium-term margin expectations from above 8% to above 5%. This year is designated an investment phase, with a new logistics center under construction in Pilsen and automation work underway at the Sevenum site. Meanwhile, the board has seen change: Chief Commercial Officer Dirk Brüse resigned for personal reasons in April, leaving CEO Olaf Heinrich to handle the role on an interim basis. Three new supervisory board members were elected at the annual general meeting, among them Bayer AG's Max Müller.

The next major test arrives on July 29, when Redcare publishes its half-year report. The market will be watching whether revenue growth can sustain its first-quarter pace and — more critically — whether margin improvements can put the 2.5% EBITDA target within reach. For now, the stock is caught between a cohort of bulls with nine-figure price targets and a record wave of short sellers betting the other way. The answer, if it comes, will need to be delivered in hard numbers.

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Redcare Pharmacy Stock: New Analysis - 30 May

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