Redcare Pharmacy NV (ETR:RDC): Is Breakeven Near?

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 €2.5b market-cap company posted a loss in its most recent financial year of €78m and a latest trailing-twelve-month loss of €16m shrinking the gap between loss and breakeven. Many investors are wondering about the rate at which Redcare Pharmacy will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View our latest analysis for Redcare Pharmacy

Redcare Pharmacy is bordering on breakeven, according to the 12 German Consumer Retailing analysts. They anticipate the company to incur a final loss in 2024, before generating positive profits of €40m in 2025. Therefore, the company is expected to breakeven just over a year from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 60% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won’t go into details of Redcare Pharmacy's upcoming projects, but, take into account that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 39% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces 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 compiled a list of pertinent aspects 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.