Medical System Network Co., Ltd. (4350) AI Stock Analysis

• Market Cap: ¥15.72B
• Dividend Yield: 2.32%
• Average Volume (3M): 49.94K
• Price to Earnings (P/E): 18.4
• Beta (1Y): 0.74
• Revenue Growth: 6.60%
• EPS Growth: 27.97%
• Country: JP
• Employees: 3,744
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Pharmaceuticals
• EPS (TTM): 19.08
• Shares Outstanding: 30,642,600
• 10 Day Avg. Volume: 63,720
• 30 Day Avg. Volume: 49,936
• PEG Ratio: -0.30
• Price to Book (P/B): 0.71
• Price to Sales (P/S): 0.09
• P/FCF Ratio: 6.56
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 70 Outperform
• Price Target: ¥583.00 ▲(11.90% Upside)
• Action: Upgraded Date: 10/18/25
• Date: Action: Upgraded 10/18/25

The stock of Medical System Network Co., Ltd. scores well due to its solid financial performance and attractive valuation. While technical indicators suggest a neutral trend, the reasonable P/E ratio and dividend yield enhance its investment appeal. The absence of earnings call data and corporate events limits additional insights.

Positive Factors

Consistent Revenue Growth

Consistent top-line growth — revenue rose from ¥104.257b to ¥122.387b over five years — indicates sustained demand for its healthcare services. Durable revenue expansion supports scale economics, recurring client relationships and capacity to reinvest in product and service expansion.

Strengthened Equity Base

The balance sheet's equity increase from ¥9.419b to ¥16.26b strengthens capitalization and asset backing. A favorable equity ratio provides financial flexibility for capex, M&A or downturns, reduces solvency risk and supports long-term strategic investments and credibility with partners.

Operating Cash Generation

Stable, positive operating cash flow and a healthy operating cash flow to net income ratio signal reliable cash generation from core services. Strong cash conversion supports dividends, working capital and capex without overreliance on external financing, enhancing long-term resilience.

Negative Factors

Declining Free Cash Flow

Free cash flow variability and a recent significant reduction erode the internal funding cushion for growth and shareholder returns. If persistent, lower FCF will constrain organic investment, increase dependence on debt or equity financing and weaken strategic flexibility over the medium term.

Profitability/EPS Pressure

A sharp EPS contraction (≈-48.6%) and a slight recent net margin decline point to structural profit pressure. Sustained deterioration in profitability reduces reinvestment capacity, limits dividend sustainability and undermines returns, making the business more vulnerable if revenue growth slows.

Moderate / Elevated Leverage

The company's debt-to-equity is characterized as moderate but slightly elevated versus peers. Higher leverage reduces financial flexibility, raises interest and refinancing risk, and can amplify downside in cash-flow shocks, constraining strategic options during prolonged industry stress.

Medical System Network Co., Ltd. Business Overview & Revenue Model

Company Description

Medical System Network Co., Ltd. distributes pharmaceutical products for pharmacies, hospitals, clinics, and pharmaceutical wholesalers. The company operates through Community Pharmacy Network, Leasing and Facility-related, Meal Catering, and Other Segments. The Community Pharmacy Network segment facilitates purchase and sale of pharmaceuticals between pharmacies, hospitals, clinics, and pharmaceutical wholesalers. This segment also offers inventory management and inventory clearance services, as well as manufactures and markets pharmaceuticals, and involved in negotiating prices with pharmaceutical wholesalers. It operates pharmaceutical platform for transition of pharmacies. Its Leasing and Facility-related segment involves in building leasing services and develops locations for pharmacies, as well as offers consulting services for physicians. The company's Meal Catering segment provides meal catering services for hospitals and welfare facilities. In addition, the company offers nursing care and advisory counseling services for medical treatment. Medical System Network Co., Ltd. was founded in 1999 and is headquartered in Sapporo, Japan.

How the Company Makes Money

Medical System Network Co., Ltd. generates revenue primarily through the sale of its software solutions and services to healthcare institutions. Key revenue streams include licensing fees for its EHR and management systems, subscription fees for cloud-based services, and maintenance contracts for ongoing support and updates. Additionally, the company benefits from partnerships with medical device manufacturers and healthcare providers, which enhance its service offerings and expand its customer base. The growing demand for digitization in healthcare and the increasing need for efficient data management contribute significantly to the company's earnings.

Medical System Network Co., Ltd. Financial Statement Overview

Summary

Medical System Network Co., Ltd. demonstrates solid financial health with consistent revenue growth and stable profitability. The balance sheet shows a strong equity position, though recent declines in free cash flow and net income margins indicate areas for improvement.

Income Statement

The company shows a consistent revenue growth with a positive trajectory, increasing from 104.257 billion to 122.387 billion over five years. Gross and net profit margins have been stable, although the net profit margin slightly declined in the last year. EBIT and EBITDA margins indicate operational efficiency, but there's a slight decrease in EBIT compared to earlier years.

Balance Sheet

The balance sheet reflects a stable equity base, with stockholders' equity increasing from 9.419 billion to 16.26 billion. The debt-to-equity ratio suggests moderate leverage, though slightly elevated compared to industry norms. The equity ratio shows a favorable position, indicating a strong asset base relative to equity.

Cash Flow

Operating cash flow has remained healthy, but a decline is noted in the latest year. Free cash flow shows variability, with a significant reduction recently. The company maintains a positive operating cash flow to net income ratio, indicative of good cash generation relative to profits.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	124.07B	122.39B	115.36B	109.55B	106.69B	104.26B
Gross Profit	51.41B	49.60B	47.93B	45.92B	44.43B	42.41B
EBITDA	6.48B	6.42B	6.90B	6.25B	7.05B	7.18B
Net Income	1.17B	1.26B	1.86B	1.61B	2.39B	2.20B
Balance Sheet
Total Assets	71.78B	70.59B	68.15B	66.22B	62.94B	64.45B
Cash, Cash Equivalents and Short-Term Investments	8.74B	8.46B	8.27B	8.14B	8.20B	10.12B
Total Debt	25.01B	29.79B	29.18B	30.52B	29.57B	32.56B
Total Liabilities	55.52B	54.24B	52.93B	51.73B	49.66B	53.26B
Stockholders Equity	16.16B	16.26B	15.17B	14.45B	13.27B	11.17B
Cash Flow
Free Cash Flow	0.00	1.75B	5.62B	3.37B	1.88B	3.68B
Operating Cash Flow	0.00	4.46B	7.72B	4.97B	4.01B	5.21B
Investing Cash Flow	0.00	-3.73B	-3.65B	-2.11B	-2.51B	-1.49B
Financing Cash Flow	0.00	-544.00M	-3.94B	-2.92B	-3.42B	-5.31B

Medical System Network Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 521.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4350, the sentiment is Neutral. The current price of 521 is below the 20-day moving average (MA) of 522.75, above the 50-day MA of 519.24, and above the 200-day MA of 487.78, indicating a neutral trend. The MACD of 0.79 indicates Positive momentum. The RSI at 50.14 is Neutral, neither overbought nor oversold. The STOCH value of 28.60 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:4350.

Medical System Network Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7649	75 Outperform	¥676.63B	15.36	15.71%	0.96%	21.81%	67.76%
4350	70 Outperform	¥15.72B	18.41	―	2.32%	6.60%	27.97%
9989	69 Neutral	¥493.65B	15.85	11.50%	3.04%	6.32%	8.19%
3391	67 Neutral	¥1.18T	29.28	―	1.72%	―	―
3549	67 Neutral	¥388.58B	21.76	―	0.41%	15.81%	27.05%
3349	60 Neutral	¥552.26B	17.63	―	0.93%	3.73%	18.84%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

Medical System Network Co., Ltd. Corporate Events

Medical System Network Grows Sales but Faces Profit Pressure in Q3 FY2026

Medical System Network Co., Ltd. reported that its pharmacy support businesses, including the pharmaceutical network, are steadily expanding, with a growing number of pharmacies using its services and new community pharmacies opened in the previous term beginning to contribute. The company also saw a steady build-out of business partners in its pharmaceutical manufacturing, sales, and logistics divisions, but operating profit declined despite a 7.4% year-on-year rise in net sales to 98.68 billion yen, as higher personnel costs and fewer patients with acute illnesses weighed on margins.

While influenza was prevalent during the period, the overall number of acute illness cases was significantly lower than a year earlier, reducing prescription volumes and impacting profitability in its pharmacy operations. At the end of the third quarter, net sales had reached 78.6% of the full-year forecast and operating profit 69.8%, indicating solid top-line progress but pressure on earnings, which may influence how investors assess the company’s efficiency and cost management going into the fiscal year-end.

The most recent analyst rating on (JP:4350) stock is a Buy with a Yen580.00 price target. To see the full list of analyst forecasts on Medical System Network Co., Ltd. stock, see the JP:4350 Stock Forecast page.

Medical System Network Posts Higher Sales but Lower Profits for Nine-Month Period, Keeps Full-Year Outlook

Medical System Network reported consolidated net sales of ¥98.7 billion for the nine months ended December 31, 2025, a 7.4% year-on-year increase, but profitability weakened, with EBITDA down 3.5%, operating profit down 7.8%, ordinary profit down 14.0% and profit attributable to owners of parent dropping 30.1% to ¥1.01 billion, leading to a decline in earnings per share to ¥34.56. The company’s balance sheet expanded, with total assets rising to ¥82.3 billion and net assets to ¥17.1 billion though the equity ratio softened to 20.6%, and management kept its full-year 2025/26 earnings and dividend forecasts unchanged, signaling confidence in achieving modest full-year growth in sales and profits despite margin pressure in the first three quarters.

The most recent analyst rating on (JP:4350) stock is a Buy with a Yen580.00 price target. To see the full list of analyst forecasts on Medical System Network Co., Ltd. stock, see the JP:4350 Stock Forecast page.