Welby Inc. (4438) AI Stock Analysis

• Market Cap: ¥3.68B
• Dividend Yield: N/A
• Average Volume (3M): 3.91K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.41
• 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: 45 Neutral
• Price Target: ¥356.00 ▲(27.60% Upside)
• Action: Reiterated Date: 02/28/26
• Date: Action: Reiterated 02/28/26

The score is held down primarily by persistent heavy losses, ongoing negative operating/free cash flow, and a sharp increase in leverage. Technicals are supportive with strong momentum and price above key moving averages, but overbought signals add near-term risk. Valuation provides limited support due to negative earnings and no dividend yield data.

Positive Factors

Revenue recovery

A ~78% revenue rebound in 2025 after prior declines demonstrates renewed customer demand and market traction. If sustained, this top-line recovery can drive operating leverage, absorb fixed costs, and provide a clearer path toward durable profitability and reinvestment.

High gross margin

A ~71% gross margin indicates the business earns high incremental profit on revenue, consistent with a product/service mix with limited variable cost. This margin profile supports long-term reinvestment in growth, resilience to cost shocks, and faster improvement in profitability as revenues scale.

Lean headcount

A small workforce (54 employees) implies a lean operating structure that can enable scalable revenue per employee and operating leverage. As revenue grows, the company can potentially expand margins without proportional payroll increases, improving long-term cash conversion if demand persists.

Negative Factors

Persistent negative cash flow

Consistent negative OCF and FCF force reliance on external financing to fund operations and capex. Persistent cash burn reduces strategic flexibility, increases refinancing and dilution risk, and magnifies vulnerability if revenue momentum weakens or financing conditions tighten.

Deep operating and net losses

Severe multi-year operating and net losses erode equity and limit the company's ability to self-fund growth or invest in product development. Without a clear, sustained move toward positive operating income, ongoing losses create structural viability and funding risks.

Sharply higher leverage

A rapid rise in debt-to-equity to ~2.22x materially weakens the balance sheet and raises interest and refinancing risk. Elevated leverage constrains strategic options, increases fixed financing costs, and amplifies downside if cash flows remain negative or growth disappoints.

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.

How the Company Makes Money

Welby Inc. generates revenue primarily through the sale of its software solutions and subscription-based services. The company operates on a SaaS (Software as a Service) model, where healthcare organizations pay a recurring fee to access and utilize its platforms. Key revenue streams include licensing fees for its software products, subscription fees for ongoing service and support, and fees for additional features or modules that customers can opt to integrate into their existing systems. Additionally, Welby Inc. has established partnerships with healthcare providers and technology firms to expand its market reach and enhance its product offerings, which contribute significantly to its earnings.

Welby Inc. Financial Statement Overview

Summary

Despite strong 2025 revenue rebound (~+78%) and healthy gross margin (~71%), results remain dominated by very large operating and net losses (operating margin ~-71%, net margin ~-85). Cash flow is consistently negative (2025 OCF ~-¥329M; FCF ~-¥332M), and leverage rose sharply in 2025 (debt-to-equity ~2.22x), increasing financing risk.

Income Statement

Revenue rebounded strongly in 2025 (annual revenue up ~78% after declines in 2023–2024), and gross margin remained healthy (~71%), indicating decent underlying pricing/premium mix. However, profitability is the key issue: 2025 shows deep operating losses (operating margin around -71%) and a very large net loss (net margin around -85%), following similarly heavy losses in 2023–2024. The business has not shown a stable path to sustained profitability since the brief profit in 2022.

Balance Sheet

The balance sheet weakened materially in 2025 as leverage rose sharply: debt-to-equity increased to ~2.22x (from ~0.25x in 2024 and near-zero in 2022–2023), reducing financial flexibility. Equity is still positive, but it has fallen significantly versus prior years, consistent with the multi-year net losses. Overall asset base is sizable, but the step-up in debt is a notable risk if losses persist.

Cash Flow

Cash generation remains pressured: operating cash flow and free cash flow were negative across all years shown, including 2025 (operating cash flow about -¥329M; free cash flow about -¥332M). While cash burn improved versus 2024, the company is still funding operations and investment with external capital rather than internally generated cash, which increases financing risk—especially given the higher leverage in 2025.

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	1.00M	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: Positive
• Last Price: 279.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4438, the sentiment is Positive. The current price of 279 is below the 20-day moving average (MA) of 287.55, below the 50-day MA of 289.08, and below the 200-day MA of 321.67, indicating a bullish trend. The MACD of 4.66 indicates Negative momentum. The RSI at 82.54 is Negative, neither overbought nor oversold. The STOCH value of 85.42 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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	¥37.11B	11.27	―	2.58%	8.10%	42.93%
5592	66 Neutral	¥29.79B	11.64	―	1.03%	16.86%	241.49%
3902	63 Neutral	¥65.51B	226.94	―	0.39%	6.17%	-8918.66%
4483	63 Neutral	¥266.64B	39.51	―	0.43%	20.55%	48.62%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
4480	51 Neutral	¥61.08B	60.86	8.79%	―	31.95%	-40.95%
4438	45 Neutral	¥3.68B	-6.82	―	―	16.19%	-4.42%