Welby Inc. (4438) AI Stock Analysis

• Market Cap: ¥2.91B
• 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: 50 Neutral
• Price Target: ¥383.00 ▲(37.28% Upside)
• Action: Reiterated Date: 03/17/26
• Date: Action: Reiterated 03/17/26

The score is held down primarily by weak financial performance—large ongoing losses, persistent cash burn, and a sharp increase in leverage. This is partially offset by improving technicals with price above key moving averages and positive MACD, while valuation remains challenging due to negative earnings and no provided 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 (~+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. Leverage also rose sharply in 2025 (debt-to-equity ~2.22x), increasing financial risk 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	1.21M	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	¥34.63B	16.74	―	2.58%	8.10%	42.93%
5592	66 Neutral	¥28.98B	15.04	―	1.03%	16.86%	241.49%
3902	63 Neutral	¥65.59B	228.03	―	0.39%	6.17%	-8918.66%
4483	63 Neutral	¥214.31B	26.76	―	0.43%	20.55%	48.62%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
4480	51 Neutral	¥57.19B	77.03	5.76%	―	31.95%	-40.95%
4438	50 Neutral	¥2.91B	-4.28	―	―	16.19%	-4.42%