Welby Inc. (4438) AI Stock Analysis

• Market Cap: ¥3.02B
• Dividend Yield: N/A
• Average Volume (3M): 3.91K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.34
• 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: 51 Neutral
• Price Target: ¥367.00 ▲(31.54% Upside)
• Action: Reiterated Date: 03/07/26
• Date: Action: Reiterated 03/07/26

The score is held back primarily by weak financial performance—persistent heavy losses, ongoing cash burn, and a sharp increase in leverage—despite strong recent revenue growth. Technical indicators are supportive (price above major moving averages and positive MACD), but valuation remains constrained by negative earnings and no stated dividend.

Positive Factors

Revenue & Gross Margin Recovery

A strong 2025 revenue rebound combined with a ~71% gross margin indicates the core product or service retains pricing power and demand. If the company can rein in operating costs, these fundamentals support a durable path to improved profitability and scalable unit economics over the next several quarters.

Industry Exposure

Operating in healthcare information services provides structural tailwinds as health systems digitize and demand for data-driven tools grows. This market orientation supports sustained addressable market expansion and recurring demand for software and information services over a multi-quarter horizon.

Lean Headcount / Scalability

A small employee base implies a relatively low fixed-cost structure and potential for operating leverage. With high gross margins, incremental revenue can flow more directly to operating income if sales scale, enabling durable margin improvement as the business grows without proportionate headcount increases.

Negative Factors

Persistent Large Losses

Multi-year, deep operating and net losses materially weaken financial resilience. Such sustained negative profitability consumes capital, limits reinvestment capacity, and delays any durable path to self-sustaining earnings absent clear and persistent cost or revenue mix improvements.

Negative Operating & Free Cash Flow

Consistent negative operating and free cash flow forces reliance on external financing to fund operations and growth. This undermines long-term flexibility, increases refinancing and liquidity risk, and can constrain product investment or market expansion if external capital becomes more costly or limited.

Sharp Rise in Leverage

A rapid jump in leverage reduces financial flexibility and raises interest and covenant risk, especially while losses persist. Higher debt levels make the company more vulnerable to funding or refinancing shocks and increase the likelihood of dilution or restructuring if operating performance does not improve.

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 strong 2025 revenue rebound 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 as leverage rose sharply (debt-to-equity ~2.22x), reducing financial flexibility while 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: Neutral

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 317.85, below the 50-day MA of 301.48, and below the 200-day MA of 323.19, indicating a bullish trend. The MACD of 28.28 indicates Negative momentum. The RSI at 55.92 is Neutral, neither overbought nor oversold. The STOCH value of 66.06 is Neutral, 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	16.74	―	2.58%	8.10%	42.93%
5592	66 Neutral	¥30.43B	15.04	―	1.03%	16.86%	241.49%
3902	63 Neutral	¥65.51B	228.03	―	0.39%	6.17%	-8918.66%
4483	63 Neutral	¥269.91B	26.76	―	0.43%	20.55%	48.62%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
4438	51 Neutral	¥3.02B	-4.28	―	―	16.19%	-4.42%
4480	51 Neutral	¥63.74B	77.03	5.76%	―	31.95%	-40.95%