M3 (2413) AI Stock Analysis

• Market Cap: ¥1.08T
• Dividend Yield: 1.01%
• Average Volume (3M): 2.99M
• Price to Earnings (P/E): 21.7
• Beta (1Y): 0.88
• Revenue Growth: 33.50%
• EPS Growth: 17.26%
• Country: JP
• Employees: 12,100
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Healthcare Information Services
• EPS (TTM): 27.95
• Shares Outstanding: 679,115,800
• 10 Day Avg. Volume: 2,689,370
• 30 Day Avg. Volume: 2,988,500
• PEG Ratio: -2.70
• Price to Book (P/B): 3.05
• Price to Sales (P/S): 4.06
• P/FCF Ratio: 25.43
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: ¥2,628.00
• Price Target Upside: 21.84% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 70 Outperform
• Price Target: ¥1,787.00 ▼(-17.15% Downside)
• Action: Reiterated Date: 02/14/26
• Date: Action: Reiterated 02/14/26

The score is driven primarily by strong financial performance (solid revenue growth, high gross margin, and strong free cash flow with good cash conversion) and a conservative balance sheet. This is tempered by weak technical conditions (price below all major moving averages and negative MACD, despite oversold readings) and a moderate valuation profile (P/E ~24 with a modest dividend yield).

Positive Factors

Strong Free Cash Flow

M3's large absolute free cash flow and strong cash conversion provide durable internal funding for product investment, acquisitions, and shareholder returns. Robust FCF cushions the business through cycles and supports multi-year strategic initiatives without relying on external financing.

Conservative Balance Sheet

A high equity ratio and very low leverage give M3 financial flexibility to invest in growth, absorb industry shocks, and pursue M&A opportunistically. This conservative structure lowers financial risk and preserves capital allocation optionality over the coming 2–6 months and beyond.

High Margin & Revenue Growth

Double-digit revenue growth coupled with a >50% gross margin indicates a scalable, high-value digital platform and pricing power in healthcare services. This combination supports sustainable operating leverage and reinvestment capacity to reinforce market position over time.

Negative Factors

Declining Profitability Metrics

The material drop in EBIT margin and ROE signals reduced operating efficiency or competitive/structural pressures. If persistent, this erosion can limit the firm's ability to convert revenue growth into shareholder returns and constrain long-term reinvestment and dividend capacity.

Moderated FCF Growth from Higher Capex

Rising capital expenditures that moderate FCF growth can be necessary for platform investment, but sustained higher capex reduces near-term cash remitability. Unless these investments drive commensurate revenue and margin gains, they may weaken cash available for buybacks or dividends.

Net Margin Compression

A declining net margin despite revenue expansion suggests cost pressure or lower pricing power in parts of the business. Structural margin compression would reduce cashflow generation per revenue unit and make it harder to restore historical ROE and fund strategic initiatives sustainably.

M3 Business Overview & Revenue Model

Company Description

M3, Inc. provides medical-related services primarily to physicians and other healthcare professionals through Internet. The company operates through five reporting segments: Medical Platform, Evidence Solution, Career Solution, Site Solution, and Overseas. It operates m3.com, a members-only Web site for providing information to the healthcare professionals; MR-kun, where member doctors can independently and continuously receive information on the m3com platform; QOL-kun that provides life support information other than medical information to members; AskDoctors, where registered doctors answer questions about health and illness from the general public; MDLinx for medical professionals in the United States; and Doctorsnetuk, a website that provides developing services for pharmaceutical companies, as well as provides drug information database in France, Germany, and Spain. The company also provides career services for doctors and pharmacists through m3com CAREER. In addition, it engages in the sales activities and marketing operations for pharmaceuticals and medical devices; development, sale, and support business of electronic medical records and medical equipment for medical institutions; survey service for medical professionals; sale and marketing support businesses for pharmaceutical companies, etc. through the Internet; provision of management support and consulting services to medical institutions, and home-visit nursing services; and provision of human resources services for healthcare professionals, as well as operates clinical trial facilities. The company was formerly known as So-netM3, Inc. and changed its name to M3, Inc. in January 2010. M3, Inc. was incorporated in 2000 and is headquartered in Tokyo, Japan.

How the Company Makes Money

M3 generates revenue through multiple streams, primarily by offering subscription-based services and transaction fees for its digital platforms. The company partners with pharmaceutical companies to provide patient recruitment services for clinical trials, which is a significant revenue driver. Additionally, M3 earns income from its advertising services, connecting healthcare professionals with relevant products and services. Key partnerships with healthcare organizations and technology providers further enhance its service offerings and contribute to its financial performance, as they enable M3 to expand its reach and improve service delivery.

M3 Financial Statement Overview

Summary

Strong fundamentals supported by 19.28% revenue growth (2024 to 2025), healthy 54.19% gross margin, and robust free cash flow of ¥45.45B with solid cash conversion (operating cash flow/net income of 1.28). Offsetting this strength, profitability has softened with a lower EBIT margin (21.56% vs. 27.43% in 2022) and reduced ROE (10.70% vs. 24.76% in 2022).

Income Statement

M3 has demonstrated strong revenue growth with a 19.28% increase from 2024 to 2025. The gross profit margin stands at 54.19% for 2025, indicating efficient cost management. However, there's a slight decrease in EBIT margin to 21.56% from 27.43% in 2022, suggesting increased operational costs. Despite this, the net profit margin of 14.21% in 2025 is robust, though down from previous years, reflecting slight pressure on profitability.

Balance Sheet

The company maintains a strong equity position, with an equity ratio of 65.03% in 2025, which indicates financial stability. The debt-to-equity ratio is low at 0.06, showing conservative leverage. Return on equity (ROE) has slightly decreased to 10.70% from 2022's 24.76%, pointing to reduced profitability relative to equity.

Cash Flow

Cash flow management is a key strength for M3, with an impressive free cash flow of ¥45.45 billion in 2025. The operating cash flow to net income ratio is strong at 1.28, indicating efficient conversion of income into cash. However, free cash flow growth has moderated, reflecting increased capital expenditures.

Breakdown	TTM	Mar 2026	Mar 2025	Mar 2024	Mar 2023	Mar 2022
Income Statement
Total Revenue	306.89B	284.90B	238.88B	230.82B	208.16B	169.20B
Gross Profit	203.32B	154.36B	140.53B	135.19B	123.27B	103.40B
EBITDA	52.67B	75.03B	76.75B	80.35B	104.59B	64.08B
Net Income	41.08B	40.48B	45.27B	49.03B	63.84B	37.82B
Balance Sheet
Total Assets	584.60B	581.74B	490.78B	400.64B	345.98B	273.12B
Cash, Cash Equivalents and Short-Term Investments	102.14B	134.93B	179.83B	146.39B	141.22B	115.40B
Total Debt	26.14B	24.42B	31.78B	10.38B	8.30B	9.02B
Total Liabilities	175.49B	168.94B	124.08B	91.13B	82.03B	65.86B
Stockholders Equity	374.30B	378.44B	351.92B	302.63B	257.84B	199.81B
Cash Flow
Free Cash Flow	0.00	45.45B	50.73B	49.54B	48.89B	44.64B
Operating Cash Flow	0.00	51.74B	58.31B	57.11B	52.11B	46.63B
Investing Cash Flow	0.00	-39.15B	-39.46B	-21.93B	-23.41B	3.59B
Financing Cash Flow	0.00	-27.16B	9.43B	-22.84B	-16.37B	-11.62B

M3 Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2157.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:2413, the sentiment is Negative. The current price of 2157 is above the 20-day moving average (MA) of 1777.00, above the 50-day MA of 1962.86, and above the 200-day MA of 2104.45, indicating a bearish trend. The MACD of -119.07 indicates Positive momentum. The RSI at 22.24 is Positive, neither overbought nor oversold. The STOCH value of 7.04 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:2413.

M3 Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2413	70 Outperform	¥1.08T	21.75	12.15%	1.01%	33.50%	17.26%
9341	70 Outperform	¥10.75B	27.82	―	5.30%	0.09%	-48.79%
3902	63 Neutral	¥65.55B	227.21	―	0.39%	6.17%	-8918.66%
4483	63 Neutral	¥261.06B	37.76	―	0.43%	20.55%	48.62%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
4480	51 Neutral	¥68.29B	68.78	8.79%	―	31.95%	-40.95%
4438	45 Neutral	¥2.31B	-4.29	―	―	16.19%	-4.42%

M3 Corporate Events

M3 Builds Momentum With Double-Digit Profit Growth, Sticks to FY2026 Outlook

The company delivered strong nine-month FY2025 results, with revenue climbing 28.6% to ¥264.4 billion and profit attributable to owners rising 28% to ¥41.7 billion on broad-based growth across its medical marketing and digital solutions, lifting EPS to ¥61.42 and bolstering comprehensive income by 44.2%. Management maintained full-year guidance calling for ¥360 billion in revenue and ¥45 billion in profit attributable to owners, while keeping dividend plans under review to balance capital needs—signals that M3 expects sustained demand for its healthcare platform despite the absence of a declared payout schedule.

The most recent analyst rating on (JP:2413) stock is a Hold with a Yen2092.00 price target. To see the full list of analyst forecasts on M3 stock, see the JP:2413 Stock Forecast page.

M3 Reports Progress on Ongoing ¥20 Billion Share Buyback Program

M3, Inc. has reported the status of its ongoing share repurchase program authorized by its board in May 2025 under the Companies Act of Japan. Between January 1 and January 31, 2026, the company bought back 206,200 common shares on the Tokyo Stock Exchange through discretionary trading, for a total of ¥418.7 million, bringing cumulative repurchases under the current authorization to 1,966,700 shares at a cost of about ¥4.07 billion. The program allows for purchases of up to 20 million shares or ¥20 billion through April 30, 2026, giving M3 continued flexibility to return capital to shareholders and potentially support its share price, although the company notes that actual repurchases may fall short of the stated maximum depending on market conditions.

The most recent analyst rating on (JP:2413) stock is a Hold with a Yen2092.00 price target. To see the full list of analyst forecasts on M3 stock, see the JP:2413 Stock Forecast page.

M3 Continues Share Buyback, Uses Fraction of ¥20 Billion Authorization

M3, Inc. has disclosed the latest status of its ongoing share repurchase program authorized by its board in May 2025 under Article 459 of Japan’s Companies Act. Between December 1 and December 31, 2025, the company repurchased 160,400 common shares on the Tokyo Stock Exchange via discretionary trades for a total of ¥348.27 million, bringing cumulative buybacks under the current authorization as of December 31, 2025 to 1,760,500 shares for approximately ¥3.65 billion. This remains well within the approved ceiling of up to 20 million shares or ¥20 billion through April 30, 2026, signaling that M3 still has substantial capacity to continue buybacks as a tool for capital allocation and shareholder return, while retaining flexibility to adjust activity depending on market conditions.

The most recent analyst rating on (JP:2413) stock is a Buy with a Yen2760.00 price target. To see the full list of analyst forecasts on M3 stock, see the JP:2413 Stock Forecast page.

M3 Introduces Long-Term Stock Option Incentives to Align Employee and Shareholder Interests

M3, Inc. has approved the issuance of share-based remuneration stock options in the form of share acquisition rights to further align employee incentives with the company’s medium- to long-term performance and strengthen shareholder-oriented management. Under the plan, one employee will receive up to 155 stock acquisition rights, each corresponding to 100 common shares, with no cash payment required and an exercise price of 1 yen per share, exercisable between July 1, 2028 and August 21, 2055; the number of underlying shares may be adjusted in the event of share splits or consolidations, underscoring M3’s use of equity incentives as a tool to retain key talent and support long-term value creation for shareholders.

The most recent analyst rating on (JP:2413) stock is a Buy with a Yen2760.00 price target. To see the full list of analyst forecasts on M3 stock, see the JP:2413 Stock Forecast page.

M3, Inc. Announces Share Repurchase Update

M3, Inc. announced the repurchase of 149,400 of its own common shares for a total of 358,058,600 yen during November 2025. This move is part of a broader share repurchase program authorized by the Board of Directors, allowing for the repurchase of up to 20 million shares or 20 billion yen, aimed at optimizing capital structure and potentially enhancing shareholder value.

The most recent analyst rating on (JP:2413) stock is a Buy with a Yen2965.00 price target. To see the full list of analyst forecasts on M3 stock, see the JP:2413 Stock Forecast page.