Welby Inc. (4438) AI Stock Analysis

• Market Cap: ¥3.04B
• 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: 52 Neutral
• Price Target: ¥370.00 ▲(32.62% Upside)
• Action: Reiterated Date: 03/04/26
• Date: Action: Reiterated 03/04/26

The score is held back primarily by weak financial quality—persistent large losses, ongoing cash burn, and a sharp rise in leverage—despite strong recent revenue growth. Technicals are a meaningful offset with a clear uptrend and positive momentum. Valuation remains constrained by negative earnings and no stated dividend yield.

Positive Factors

Revenue recovery & growth trend

A sharp 2025 revenue rebound (~+78%) after prior declines indicates recovering end-market demand and successful commercial execution. Sustained top-line growth provides a foundation to leverage fixed costs and pursue durable margin improvement if the company sustains sales expansion over the next several quarters.

High gross margin

A ~71% gross margin signals strong unit economics or high-value services, leaving substantial headroom to absorb SG&A and R&D as revenue scales. Durable gross margins increase the potential for operating leverage, making a pathway to sustainable profitability more attainable if operating expenses are disciplined.

Lean headcount / operational scalability

A small workforce (54 employees) combined with recent revenue growth suggests a lean, potentially scalable operating model with lower fixed labor overhead. If the business is tech- or platform-driven, this structure supports high incremental margins as sales scale and improves the chance of durable margin expansion over months.

Negative Factors

Deep, persistent unprofitability

Very large operating and net losses (operating margin ~-71%, net margin ~-85%) reflect structural profitability challenges. Multiyear losses erode equity and demand material improvement in revenue mix or cost structure to reach self-sustaining profitability over the medium term, increasing execution risk.

Persistent negative cash generation

Negative operating and free cash flow across years, including 2025, indicate ongoing cash burn and reliance on external financing. Continued negative cash generation constrains strategic flexibility and increases financing risk over months, especially if revenue or margins fail to improve sufficiently to cover cash needs.

Material rise in leverage

Leverage jumped materially to ~2.22x in 2025 from ~0.25x in 2024, weakening the balance sheet. Higher debt magnifies refinancing and solvency risk if losses persist, limits financial flexibility for investments or M&A, and increases the probability of dilutive or costly financing over the coming months.

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 a sharp 2025 revenue rebound (~+78%) and healthy gross margin (~71%), results are dominated by very large operating and net losses (operating margin ~-71%, net margin ~-85%) and continued negative operating/free cash flow. Balance-sheet risk increased materially with debt-to-equity rising to ~2.22x, reducing flexibility if losses persist.

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: Neutral
• 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 299.80, below the 50-day MA of 294.08, and below the 200-day MA of 322.31, indicating a bullish trend. The MACD of 18.81 indicates Negative momentum. The RSI at 62.55 is Neutral, neither overbought nor oversold. The STOCH value of 84.62 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	¥36.25B	10.88	―	2.58%	8.10%	42.93%
5592	66 Neutral	¥29.31B	11.13	―	1.03%	16.86%	241.49%
3902	63 Neutral	¥65.55B	227.08	―	0.39%	6.17%	-8918.66%
4483	63 Neutral	¥256.17B	37.05	―	0.43%	20.55%	48.62%
4438	52 Neutral	¥3.04B	-5.63	―	―	16.19%	-4.42%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
4480	51 Neutral	¥58.33B	58.12	8.79%	―	31.95%	-40.95%