CareNet (TSE:2150) - Share price, News & Analysis

Q: What is the Fair Price of 2150 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

2150 (¥943) is trading below our estimate of [[fair value]] (¥4745.5)

2150 fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	5/6
Past Performance	2/6
Financial Health	6/6
Dividends	0/6

2150 Stock Overview

CareNet, Inc. provides pharmaceutical sales support services for pharmaceutical companies in Japan.

Rewards

Trading at 80.1% below our estimate of its fair value

Earnings are forecast to grow 24.15% per year

Earnings have grown 39.7% per year over the past 5 years

Risk Analysis

Highly volatile share price over the past 3 months

Shareholders have been diluted in the past year

CareNet Competitors

MedPeerInc

TSE:6095

JP¥40.4b

Medical Data Vision

TSE:3902

JP¥40.1b

Software Service

TSE:3733

JP¥35.1b

Kanamic NetworkLTD

TSE:3939

JP¥25.5b

Price History & Performance

Summary of all time highs, changes and price drops for CareNet
Historical stock prices
Current Share Price	JP¥943.00
52 Week High	JP¥2,162.50
52 Week Low	JP¥659.00
Beta	2.52
1 Month Change	8.02%
3 Month Change	8.89%
1 Year Change	-54.11%
3 Year Change	453.89%
5 Year Change	436.56%
Change since IPO	238.30%

Shareholder Returns

	2150	JP Healthcare Services	JP Market
7D	8.9%	11.0%	1.8%
1Y	-54.1%	-44.8%	-4.7%

Return vs Industry: 2150 underperformed the JP Healthcare Services industry which returned -44.8% over the past year.

Return vs Market: 2150 underperformed the JP Market which returned -4.7% over the past year.

Price Volatility

Is 2150's price volatile compared to industry and market?
2150 volatility
2150 Average Weekly Movement	11.8%
Healthcare Services Industry Average Movement	7.7%
Market Average Movement	4.2%
10% most volatile stocks in JP Market	8.5%
10% least volatile stocks in JP Market	2.3%

Stable Share Price: 2150 is more volatile than 90% of JP stocks over the past 3 months, typically moving +/- 12% a week.

Volatility Over Time: 2150's weekly volatility (12%) has been stable over the past year, but is still higher than 75% of JP stocks.

About the Company

Founded	Employees	CEO	Website
1996	161	Motoyasu Ohno	https://www.carenet.co.jp

CareNet, Inc. provides pharmaceutical sales support services for pharmaceutical companies in Japan. It offers medical content services for doctors and healthcare professionals. The company offers CareNet.com, a membership-based medical and medical information site for daily clinical practice; PubMedCLOUD, a tool for searching and managing PubMed articles in Japanese; Doctors'Picks, a site where doctors gather specialized news that they want their doctors to read; CareNeTV, a clinical medicine channel; CareNet DVD, a clinical medical education DVD teaching material; and CareNet Career, a service that guides candidates for work in response to the needs of CareNet members, such as doctors for changing jobs and seeking employment.

CareNet Fundamentals Summary

How do CareNet's earnings and revenue compare to its market cap?
2150 fundamental statistics
Market Cap	JP¥41.75b
Earnings (TTM)	JP¥1.58b
Revenue (TTM)	JP¥8.17b

26.4x

P/E Ratio

5.1x

P/S Ratio

Is 2150 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
2150 income statement (TTM)
Revenue	JP¥8.17b
Cost of Revenue	JP¥2.54b
Gross Profit	JP¥5.63b
Other Expenses	JP¥4.05b
Earnings	JP¥1.58b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Aug 10, 2022

Earnings per share (EPS)	35.69
Gross Margin	68.93%
Net Profit Margin	19.34%
Debt/Equity Ratio	0.1%

How did 2150 perform over the long term?

See historical performance and comparison

Dividends

0.6%

Current Dividend Yield

16%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is 2150 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for 2150?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for 2150. This is calculated by dividing 2150's market cap by their current preferred multiple.
What is 2150's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	JP¥41.75b

2150 key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	4.3x
Enterprise Value/EBITDA	13.3x
PEG Ratio	1.1x

Price to Earnings Ratio vs Peers

How does 2150's PE Ratio compare to its peers?

2150 PE Ratio vs Peers

The above table shows the PE ratio for 2150 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	31.7x
6095 MedPeerInc	36x	22.2%	JP¥40.4b
3902 Medical Data Vision	36.8x	14.8%	JP¥40.1b
3733 Software Service	10.3x	n/a	JP¥35.1b
3939 Kanamic NetworkLTD	43.8x	23.6%	JP¥25.5b
2150 CareNet	26.4x	24.1%	JP¥41.8b

Forward PE

Price-To-Earnings vs Peers: 2150 is good value based on its Price-To-Earnings Ratio (26.4x) compared to the peer average (31.7x).

Price to Earnings Ratio vs Industry

How does 2150's PE Ratio compare vs other companies in the Asian Healthcare Services Industry?

Price-To-Earnings vs Industry: 2150 is good value based on its Price-To-Earnings Ratio (26.4x) compared to the JP Healthcare Services industry average (36.2x)

Price to Earnings Ratio vs Fair Ratio

What is 2150's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

2150 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	26.4x
Fair PE Ratio	32.1x

Price-To-Earnings vs Fair Ratio: 2150 is good value based on its Price-To-Earnings Ratio (26.4x) compared to the estimated Fair Price-To-Earnings Ratio (32.1x).

Share Price vs Fair Value

What is the Fair Price of 2150 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 2150 (¥943) is trading below our estimate of fair value (¥4745.5)

Significantly Below Fair Value: 2150 is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: 2150 is poor value based on its PEG Ratio (1.1x)

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Future Growth

How is CareNet forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

Future Growth Score

5/6

Future Growth Score 5/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

24.1%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: 2150's forecast earnings growth (24.1% per year) is above the savings rate (0.02%).

Earnings vs Market: 2150's earnings (24.1% per year) are forecast to grow faster than the JP market (8.9% per year).

High Growth Earnings: 2150's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: 2150's revenue (19.3% per year) is forecast to grow faster than the JP market (4.5% per year).

High Growth Revenue: 2150's revenue (19.3% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: 2150's Return on Equity is forecast to be high in 3 years time (25.7%)

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Past Performance

How has CareNet performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

39.7%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 2150 has high quality earnings.

Growing Profit Margin: 2150's current net profit margins (19.3%) are lower than last year (21.4%).

Past Earnings Growth Analysis

Earnings Trend: 2150's earnings have grown significantly by 39.7% per year over the past 5 years.

Accelerating Growth: 2150's earnings growth over the past year (13%) is below its 5-year average (39.7% per year).

Earnings vs Industry: 2150 earnings growth over the past year (13%) underperformed the Healthcare Services industry 27.7%.

Return on Equity

High ROE: 2150's Return on Equity (19%) is considered low.

Discover strong past performing companies

Financial Health

How is CareNet's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: 2150's short term assets (¥9.0B) exceed its short term liabilities (¥1.6B).

Long Term Liabilities: 2150's short term assets (¥9.0B) exceed its long term liabilities (¥94.0M).

Debt to Equity History and Analysis

Debt Level: 2150 has more cash than its total debt.

Reducing Debt: 2150's debt to equity ratio has reduced from 12.6% to 0.1% over the past 5 years.

Debt Coverage: 2150's debt is well covered by operating cash flow (19511.1%).

Interest Coverage: 2150 earns more interest than it pays, so coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is CareNet current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

0.64%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: 2150's dividend (0.64%) isn’t notable compared to the bottom 25% of dividend payers in the JP market (1.67%).

High Dividend: 2150's dividend (0.64%) is low compared to the top 25% of dividend payers in the JP market (3.71%).

Stability and Growth of Payments

Stable Dividend: 2150 is not paying a notable dividend for the JP market, therefore no need to check if payments are stable.

Growing Dividend: 2150 is not paying a notable dividend for the JP market, therefore no need to check if payments are increasing.

Earnings Payout to Shareholders

Earnings Coverage: 2150 is not paying a notable dividend for the JP market.

Cash Payout to Shareholders

Cash Flow Coverage: 2150 is not paying a notable dividend for the JP market.

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Management

How experienced are the management team and are they aligned to shareholders interests?

8.2yrs

Average management tenure

CEO

Motoyasu Ohno (59 yo)

26.42yrs

Tenure

Mr. Motoyasu Ohno serves as Chairman at Medical Incubator Japan K.K. Mr. Ohno is the CareNet, Inc. and serves as its Chairman. He had been the President of CareNet, Inc. since October 2015.Mr. Ohno has be...

Leadership Team

Experienced Management: 2150's management team is seasoned and experienced (8.2 years average tenure).

Board Members

Experienced Board: 2150's board of directors are considered experienced (7.3 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 6.6%.

Data	Last Updated (UTC time)
Company Analysis	2022/06/28 00:00
End of Day Share Price	2022/06/28 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31