M3 shares jump on strong quarterly earnings

M3 Inc. shares advanced sharply on Tuesday, extending gains after the healthcare technology company posted quarterly earnings that exceeded market expectations.

The Tokyo-based firm reported revenue of ¥124.7 billion ($820 million) for the three months ended June 30, up 12% year-over-year, while net profit rose 18% to ¥22.3 billion. Analysts had forecast revenue of ¥118.5 billion and net profit of ¥20.1 billion, according to a Refinitiv consensus survey.

M3’s core medical platform, which connects healthcare providers and patients, continued to drive growth, with recurring revenue accounting for 78% of total sales. The company also highlighted expansion in its overseas markets, particularly in Southeast Asia, where it has been investing in digital health services.

Shares of M3 gained as much as 7.5% intraday, reaching a 52-week high of ¥3,850 before paring some gains. The stock has outperformed the broader Topix index by nearly 20% over the past six months, reflecting investor confidence in its growth trajectory.

Analysts at SMBC Nikko Securities upgraded their price target on M3 to ¥4,200 from ¥3,900, citing strong execution and a favorable regulatory environment for digital health solutions in Japan. The firm maintained an outperform rating.

M3’s surge follows a broader rally in Japan’s healthcare technology sector, which has benefited from increased demand for telemedicine and digital health solutions amid an aging population and rising healthcare costs.

The company is scheduled to hold an earnings call with investors on Friday to provide further details on its performance and outlook.