One-glance verdict
Not enough data
Fair value unavailable
Not enough cash-flow history to value this one with our method.
Fundamentals snapshot
MEDIROM Healthcare Technologies Inc.
MRM · NCM · Consumer Cyclical · Personal Services
Current price
$0.75
52-week range
$0.72 - $4.45
Market cap
$5.93M
Balance sheet
Distressed
0.37x Concerning
Net debt $24.71M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
3 Risks
3 rewards · 3 risks
- Reward Revenue grew 21.5% last year.
- Reward Returns 53.2% on equity, ahead of 83% of its peers.
- Risk Stock trades 836.1% above its 5-year average P/E.
- Risk Net debt grew 51.2% over 3 years.
What this company does
MEDIROM Healthcare Technologies Inc.
MEDIROM is a Japanese healthcare company that earns most of its money from operating and franchising (letting others open stores using their brand name for a fee) a large chain of relaxation and massage salons. To complement its physical locations, the company is building a health ecosystem (a network of connected products) by also offering digital health apps and a fitness tracker. This strategy aims to serve customers through both in-person wellness services and modern health technology.
How the company got here
MEDIROM was founded in 2000 in Japan and has grown to become a provider of holistic health services. A key turning point was in March 2020, when it changed its name from MEDIROM Inc. to MEDIROM Healthcare Technologies Inc., signaling a greater focus on technology. The company has expanded by acquiring other businesses, such as the high-end hair salon company ZACC in 2021. In late 2020, MEDIROM held an initial public offering (IPO), which is when a private company first sells shares of stock to the public, listing its shares on the Nasdaq stock exchange to raise money for its growth.
What it actually does
MEDIROM offers a variety of health and wellness services primarily in Japan. Think of it as a one-stop shop for well-being, with services ranging from bodywork therapy at their relaxation salons to beauty treatments at their hair salons. They also have a growing technology side that includes a health-monitoring smartphone app and a unique, chargeable-free fitness tracker. Additionally, they run a college to train their staff and franchise owners, ensuring consistent service quality.
Relaxation Salon
This is the company's largest and core business, generating the majority of its revenue (the total amount of money a company brings in from sales). It operates and franchises a large number of relaxation salons under brand names like Re.Ra.Ku. Customers pay for services like finger-pressure bodywork, stretching, and other therapies designed to relieve fatigue and improve posture. This segment includes both salons directly owned by MEDIROM and those run by franchisees (independent owners who pay to use the company's brand and business model).
Digital Preventative Healthcare
This is a newer and growing part of the company that focuses on technology to help people stay healthy. A key product is the 'MOTHER Bracelet,' a fitness tracker that is uniquely powered by body heat, so it never needs to be charged. This segment also includes a smartphone app called 'Lav' that provides on-demand health monitoring and connects users with health professionals for guidance. This part of the business makes money from selling the fitness trackers and from government-sponsored health programs that use their app.
Luxury Beauty
This segment represents a smaller, more specialized part of MEDIROM's business. It consists of managing and operating high-end hair salons under the brand name ZACC. Customers at these salons pay for premium hair styling and beauty treatments. This part of the company was added through an acquisition, which is when one company purchases another.
What management is betting on now
The company's leadership is focused on becoming a comprehensive healthcare provider by combining their physical salons with new technology. A major priority is the expansion of their Digital Preventative Healthcare segment, particularly through their unique MOTHER Bracelet and Lav application. They are also exploring innovative technologies, including collaborations related to digital identity verification and the use of cryptocurrency as an incentive for users to share their health data. The company aims to continue growing its salon network in Japan and is also considering expansion into overseas markets.
Price history
How the share price has moved
—
Loading price history…
Earnings history
Last 8 quarters — what happened
Quarterly filing data is temporarily unavailable. We will retry automatically soon.
data temporarily unavailable
Is it cheap or expensive?
Fair value — vs current price $0.75
We couldn't calculate a fair value right now.
Is it drowning in debt?
Distressed
Net debt $24.7M. Interest coverage 0.4x.
Net debt
$24.71M
Interest coverage
0.37x
MEDIROM Healthcare Technologies Inc.'s profit covers its interest bill about 0.4 times over. and 2 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Distressed
Worse cushion
Baseline
Better cushion
MRM
BASELINE
MEDIROM Healthcare Technologies Inc.
Total debt $24.91M Interest coverage 0.37x This is the baseline the peer rows are being compared against.
Total debt $7.29M Interest coverage -69.82x -100% vs MRM This peer has almost no interest-payment cushion compared with MRM.
Total debt $301.43M Interest coverage 1.19x +217% vs MRM Carries about 3.2x more debt cushion than MRM.
Total debt $385.79M Interest coverage 8.50x +2,171% vs MRM Carries about 22.7x more debt cushion than MRM.
Total debt $426.31M Interest coverage 0.73x +96% vs MRM Carries about 2.0x more debt cushion than MRM.
What you should know
The case for and against MRM
3 Rewards
3 Risks
Rewards
-
Revenue grew 21.5% last year.
-
Returns 53.2% on equity, ahead of 83% of its peers.
-
Trades at 2.0x P/E vs peer median 11.5x (82.9% cheaper).
Risks
-
Stock trades 836.1% above its 5-year average P/E.
-
Net debt grew 51.2% over 3 years.
-
Operating margin compressed from -7.0% to -25.8% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
1.97x
Forward P/E
—
P/B
3.81x
P/S
0.00x
EV/EBITDA
27.82x
PEG ratio
—
Profitability
How much profit each dollar creates
Gross margin
25.1%
Operating margin
-25.8%
Net margin
0.5%
ROE
53.2%
ROA
-1.8%
Health
Liquidity and balance-sheet strength
Debt / equity
7.86x
Current ratio
0.24x
Quick ratio
0.14x
Total debt
$24.91M
Total cash
$207.71K
Growth
How the business has been compounding
Revenue TTM
$51.30M
Revenue 5Y CAGR
15.3%
EPS TTM
0.38
EPS 5Y CAGR
—
Cash flow
How much cash the business throws off
Operating CF TTM
$-8.47M
Free CF TTM
$-12.06M
FCF margin
-23.5%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
—