Analysts Expect Breakeven For Redcare Pharmacy NV (ETR:RDC) Before Long

We feel now is a pretty good time to analyse Redcare Pharmacy NV's (ETR:RDC) business as it appears the company may be on the cusp of a considerable accomplishment. Redcare Pharmacy NV owns and operates online pharmacies in the Netherlands, Germany, Italy, Belgium, Switzerland, Austria, and France. The €1.9b market-cap company posted a loss in its most recent financial year of €78m and a latest trailing-twelve-month loss of €45m shrinking the gap between loss and breakeven. The most pressing concern for investors is Redcare Pharmacy's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See our latest analysis for Redcare Pharmacy

Consensus from 11 of the German Consumer Retailing analysts is that Redcare Pharmacy is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of €29m in 2025. The company is therefore projected to breakeven around 2 years from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 65%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Redcare Pharmacy's growth isn’t the focus of this broad overview, but, bear in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one issue worth mentioning. Redcare Pharmacy currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Redcare Pharmacy's case is 42%. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Redcare Pharmacy which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Redcare Pharmacy, take a look at Redcare Pharmacy's company page on Simply Wall St. We've also put together a list of essential factors you should further research:

1. Valuation: What is Redcare Pharmacy worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Redcare Pharmacy is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Redcare Pharmacy’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.