Tadawul 4005 : National Medical Care - Technical Analysis

Technical analysis involves looking at past stock prices and trading volumes to predict future price movements. In the case of National Medical Care:

• After a significant decline from its peak, the stock price has just bounced off the trendline support with notable trading volume.
• If the price manages to break above the trendline resistance and holds, it could signal a potential trend reversal and lead to further upside movement.

Tadawul 4005 : National Medical Care - Revenue & Profit Analysis

Year-on-year

• Revenue: Increased from 1,082 Million SAR in FY23 to 1,294 Million SAR in FY24 (up by 20%). This shows the company is selling more of its services.
• EBITDA: Increased from 291 Million SAR in FY23 to 315 Million SAR in FY24. This indicates improved operating profitability.
• EBITDA Margin: This is the percentage of revenue left after covering operating expenses (excluding interest, taxes, depreciation, and amortization). It decreased from 26.9% in FY23 to 24.4% in FY24. This means that while the company is earning more overall, its profitability on each Riyal of revenue has slightly decreased.

Quarter-on-quarter

• Sales (Q4 FY24): Reached an all-time high of 372 Million SAR, up from 326 Million SAR in Q3 FY24. This indicates strong recent sales performance.
• EBITDA (Q4 FY24): Decreased to 68 Million SAR, compared to 84 Million SAR in Q3 FY24. This suggests that while sales were high, the profitability during this specific quarter was lower.
• Diluted EPS (Earnings Per Share – the profit for each outstanding share) (Last Twelve Months – LTM): Was reported at 6.66 SAR in Q4, almost the same as the 6.13 SAR reported in Q3 2024. This shows a relatively stable trend in the company’s per-share profitability over the past year.

Tadawul 4005 : National Medical Care - Valuation

1. P/E Ratio (Price-to-Earnings)

• This ratio compares the company’s stock price to its earnings per share. National Medical Care’s P/E ratio is 23.3x, which is lower than the average P/E ratio of its competitors (36.9x). A lower P/E ratio might suggest that the stock is undervalued (cheaper than it should be compared to its earnings and its peers).

2. P/B Ratio (Price-to-Book):

• This ratio compares the company’s stock price to its book value. National Medical Care’s P/B ratio is 4.3x, which is also lower than the peer average of 5.1x. However, it’s worth noting that a P/B ratio above 3x is sometimes considered high or expensive.

3. PEG Ratio (Price/Earnings to Growth):

• This ratio looks at the P/E ratio while also considering the company’s expected earnings growth. National Medical Care’s PEG ratio is 1.66, which is below 2. Generally, a PEG ratio below 1 is considered good, and below 2 suggests the stock might be undervalued relative to its growth potential.

Tadawul 4005 : National Medical Care - Cash Flow & Debt Analysis

1. Cash Flow Analysis

• Cash flow from operations is the money a company generates from its normal business activities. In FY24, this dropped significantly to 244.7 Million SAR, almost half of the 466.7 Million SAR recorded in Q3 FY24. This decrease in operating cash flow could be something investors need to monitor.

2. Debt Analysis

• As of the end of 2024 (Q4 FY24), National Medical Care had a total debt of 302 Million SAR. Their debt-to-equity ratio (a measure of how much debt a company uses to finance its assets relative to the value of shareholders’ equity) is 0.18. This is considered a low ratio, indicating that the company has a strong financial position and doesn’t rely heavily on borrowing or loans.

Tadawul 4005 : National Medical Care - Top Shareholders

• Big investment firms like The Vanguard Group (owning 1.93% of the company) and BlackRock (owning 0.86%) hold shares in National Medical Care. This can sometimes be seen as a sign of confidence in the company’s future prospects.

Conclusion

National Medical Care Company (Tadawul 4005) stands out as a strong player in Saudi Arabia’s growing healthcare sector. Backed by consistent revenue growth, solid operational performance, and a healthy balance sheet, the company is well-placed to benefit from increased healthcare demand. Its attractive valuation and recent technical signals suggest strong upside potential, making it a compelling long-term investment opportunity.