Welby Inc. (4438) AI Stock Analysis

• Market Cap: ¥2.79B
• Dividend Yield: N/A
• Average Volume (3M): 3.91K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.28
• Revenue Growth: 16.19%
• EPS Growth: -4.42%
• Country: JP
• Employees: 54
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Healthcare Information Services
• EPS (TTM): -14.98
• Shares Outstanding: 8,275,582
• 10 Day Avg. Volume: 3,070
• 30 Day Avg. Volume: 3,910
• PEG Ratio: 0.13
• Price to Book (P/B): 8.48
• Price to Sales (P/S): 3.63
• P/FCF Ratio: -6.95
• 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: 44 Neutral
• Price Target: ¥327.00 ▲(17.20% Upside)
• Action: Reiterated Date: 03/24/26
• Date: Action: Reiterated 03/24/26

The score is held down primarily by weak financial performance—persistent heavy losses, ongoing cash burn, and higher leverage in 2025. Technicals are mixed but relatively stable versus longer-term averages, while valuation remains challenging due to negative earnings and no stated dividend yield.

Positive Factors

Revenue Recovery

A strong 2025 revenue rebound demonstrates the company can re‑accelerate top‑line growth after a multi‑year downturn. Durable revenue momentum over several quarters would support operating leverage, improve unit economics, and increase the probability management can close the path to sustained profitability if growth persists.

High Gross Margin

A ~71% gross margin indicates the business sells high‑value services or software with significant pricing power and scalable delivery. Such robust product margins create room to absorb SG&A and R&D, making it structurally easier to translate revenue growth into operating profits over the medium term once fixed costs are better leveraged.

Favorable Industry Structure

Operating in healthcare information services exposes the company to secular tailwinds—digitalization of medical records, aging populations, and increasing health IT spend. These structural trends support a large addressable market and recurring demand, improving long‑term growth visibility versus cyclical consumer sectors.

Negative Factors

Persistent Large Losses

Deep and persistent operating and net losses across multiple years show the business has not yet reached sustainable profitability. Continued heavy losses erode equity, constrain reinvestment capacity, and make long‑term planning dependent on external financing or drastic cost restructuring, raising structural execution risk.

Negative Cash Generation

Consistent negative operating and free cash flow forces reliance on external capital to fund operations and growth. Over the medium term this increases financing risk, can lead to dilution or higher interest costs, and limits the firm's ability to self‑fund product investment or scale sales without repeated fundraising.

Rising Financial Leverage

A sharp rise in leverage materially reduces financial flexibility while losses persist. Higher debt magnifies downside risk during revenue volatility, increases fixed servicing costs, and constrains strategic options (M&A, R&D spend). Combined with negative cash flow, leverage elevates refinancing and solvency concerns.

Welby Inc. Business Overview & Revenue Model

Company Description

Welby Inc. provides digital health solutions that help patients to get medical care services. The company offers services in the areas of diabetes mellitus, lifestyle related disease, mental illness, autoimmune disease, neurological disease, rare disease, oncology, and pain. It also engages in the medical data survey business; and operates Welby My Carte platform. The company was incorporated in 2011 and is based in Tokyo, Japan.

Welby Inc. Financial Statement Overview

Summary

Despite a strong 2025 revenue rebound and high gross margin (~71%), the company remains deeply unprofitable (net margin ~-85%) with persistent large losses. Cash flow is consistently negative (2025 operating cash flow ~-¥329m; free cash flow ~-¥332m) and leverage increased materially in 2025 (debt-to-equity ~2.22x), elevating financial risk.

Income Statement

Revenue rebounded strongly in 2025 (annual revenue up ~78% after a weak 2024), and gross margins remain high (~71%), suggesting solid unit economics. However, profitability is the key issue: the company is deeply loss-making, with negative operating profit and a very large net loss in 2025 (net margin ~-85%), following similarly heavy losses in 2023–2024. The trajectory shows volatile growth and persistent inability to convert strong gross profit into bottom-line earnings.

Balance Sheet

The balance sheet weakened materially in 2025 as leverage increased: total debt rose to ~¥606m and debt-to-equity jumped to ~2.22x, versus low leverage in prior years. Equity also appears to have compressed significantly since 2023–2024, and returns on equity are very negative due to ongoing losses. While total assets remain sizable (~¥1.05bn), the combination of higher leverage and continued losses raises financial risk versus the company’s historically stronger capital position.

Cash Flow

Cash generation is a major concern: operating cash flow and free cash flow are negative across all shown years, including 2025 (operating cash flow ~-¥329m; free cash flow ~-¥332m). Cash burn improved versus 2024 but remains substantial, meaning the business is still reliant on financing to fund operations and investment. Overall, cash flow quality and self-funding capacity are weak despite the revenue rebound.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	630.81M	635.72M	528.04M	575.00M	1.05B	1.14B
Gross Profit	455.08M	448.67M	379.92M	376.00M	755.44M	683.91M
EBITDA	-564.74M	-423.57M	-792.75M	-499.97M	40.29M	-127.70M
Net Income	-744.65M	-539.69M	-804.60M	-505.00M	33.91M	-130.68M
Balance Sheet
Total Assets	966.27M	1.05B	1.17B	1.21B	1.40B	1.39B
Cash, Cash Equivalents and Short-Term Investments	567.83M	711.43M	740.43M	883.00M	830.82M	960.72M
Total Debt	235.00M	605.71M	200.00M	1.21M	8.35M	15.49M
Total Liabilities	365.43M	747.89M	328.90M	88.00M	121.40M	134.83M
Stockholders Equity	565.27M	272.33M	810.02M	1.09B	1.27B	1.26B
Cash Flow
Free Cash Flow	0.00	-332.29M	-776.25M	-177.00M	-146.86M	-115.46M
Operating Cash Flow	0.00	-329.49M	-603.63M	-174.00M	-114.11M	-95.95M
Investing Cash Flow	0.00	272.44M	-235.84M	-114.39M	-7.04M	-34.56M
Financing Cash Flow	0.00	28.05M	696.54M	341.25M	-8.74M	-7.14M

Welby Inc. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 279.00
• 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:4438, the sentiment is Neutral. The current price of 279 is below the 20-day moving average (MA) of 353.30, below the 50-day MA of 315.76, and below the 200-day MA of 323.41, indicating a neutral trend. The MACD of 17.07 indicates Positive momentum. The RSI at 51.24 is Neutral, neither overbought nor oversold. The STOCH value of 23.36 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:4438.

Welby Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
9438	71 Outperform	¥33.93B	16.74	―	2.58%	8.10%	42.93%
3902	63 Neutral	¥65.67B	228.03	―	0.39%	6.17%	-8918.66%
4483	63 Neutral	¥199.59B	26.76	―	0.43%	20.55%	48.62%
5592	60 Neutral	¥27.76B	15.04	―	1.03%	16.86%	241.49%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
4480	51 Neutral	¥58.33B	77.03	5.76%	―	31.95%	-40.95%
4438	44 Neutral	¥2.79B	-4.28	―	―	16.19%	-4.42%