Rakuten (4755) AI Stock Analysis

• Market Cap: $1.71T
• Dividend Yield: N/A
• Average Volume (3M): 15.39M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.17
• Revenue Growth: 10.38%
• EPS Growth: 38.09%
• Country: JP
• Employees: 29,334
• Sector: Consumer Cyclical
• Sector Strength: 59
• Industry: Specialty Retail
• EPS (TTM): -34.08
• Shares Outstanding: 2,163,506,000
• 10 Day Avg. Volume: 11,733,310
• 30 Day Avg. Volume: 15,387,036
• PEG Ratio: 0.20
• Price to Book (P/B): 1.99
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 1.95
• 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: $944.60
• Price Target Upside: 19.30% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 58 Neutral
• Price Target: ¥843.00 ▲(6.47%Upside)

Rakuten's stock score is primarily influenced by its financial performance challenges, particularly profitability and leverage. Positive factors include strong earnings call results and strategic growth initiatives. Technical indicators and valuation provide mixed signals, reflecting ongoing market uncertainties and profitability issues.

Rakuten Business Overview & Revenue Model

Company Description

Rakuten Group, Inc. offers internet services in Japan and internationally. It operates through three segments: Internet Services, FinTech, and Mobile segments. The Internet Services segment operates Rakuten Ichiba, an internet shopping mall; Rakuten Books, an online bookstore; Rakuten Travel, an internet travel site; Rakuten Gora, an online golf course reservation service; Rakuten Fashion, an online fashion store; Rakuma, a flea market app; Rakuten Rewards, which offers online cash-back services; and Rakuten 24, an internet shopping site that sells medical supplies and daily necessities. It also offers mobile messaging and VoIP, performance marketing, and e-book services. The FinTech segment issues credit cards; offers internet banking, general and life insurance, and payment services; and operates online securities trading platform. The Mobile segment provides mobile communication, optical broadband line, and power supply services. The company was formerly known as Rakuten, Inc. and changed its name to Rakuten Group, Inc. in April 2021. Rakuten Group, Inc. was incorporated in 1997 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Rakuten generates revenue through a multifaceted business model that includes e-commerce transactions, financial services, and digital content. Its e-commerce platform, Rakuten Ichiba, charges merchants fees for listing products and takes a commission on sales. In the fintech sector, Rakuten earns money from interest on loans, transaction fees from its credit card services, and financial product sales. The company also monetizes its digital content services through subscriptions and advertisements. Additionally, Rakuten's telecommunications arm, which includes mobile and internet services, contributes to its revenue through customer subscriptions and usage fees. Strategic partnerships and collaborations with other businesses further enhance Rakuten's earnings by expanding its market reach and service offerings.

Rakuten Financial Statement Overview

Summary

Rakuten exhibits moderate revenue growth but faces significant profitability challenges. The income statement shows a net loss, and the balance sheet reveals high leverage, indicating financial risk. The cash flow statement highlights declining free cash flow, though operating cash flow remains positive.

Income Statement

Rakuten's income statement shows a mixed performance. The revenue growth rate from 2024 to TTM was approximately 2.16%, indicating moderate growth. However, the company struggles with profitability, as evidenced by negative net profit margins and EBIT margins across the periods. The TTM shows a significant net loss, reflecting continued challenges in achieving profitability.

Balance Sheet

Rakuten's balance sheet reveals high leverage with a debt-to-equity ratio in the TTM of 6.42, indicating potential financial risk due to high debt levels. However, the equity ratio is fairly low at 3.26% for the TTM. The return on equity is negative due to consistent net losses, highlighting challenges in generating returns for shareholders.

Cash Flow

The cash flow statement shows some resilience with a positive operating cash flow in the TTM, although significantly lower than in 2024. The free cash flow growth rate from 2024 to TTM is negative, indicating a decline in free cash generation. However, the operating cash flow to net income ratio suggests better cash management relative to earnings.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.33T	2.28T	2.07T	1.93T	1.68T	1.46T
Gross Profit	308.82B	316.29B	790.31B	609.93B	542.63B	562.57B
EBITDA	443.66B	450.82B	146.60B	1.18B	6.47B	52.07B
Net Income	-193.52B	-162.44B	-339.47B	-375.91B	-135.83B	-115.84B
Balance Sheet
Total Assets	25.08T	26.51T	22.63T	20.44T	16.83T	12.52T
Cash, Cash Equivalents and Short-Term Investments	4.92T	6.17T	5.24T	4.69T	4.41T	3.02T
Total Debt	5.25T	5.46T	4.80T	4.91T	3.40T	2.49T
Total Liabilities	23.94T	25.28T	21.54T	19.57T	15.71T	11.90T
Stockholders Equity	818.15B	927.87B	836.57B	813.73B	1.09T	608.74B
Cash Flow
Free Cash Flow	174.09B	947.64B	373.04B	-697.36B	172.07B	656.32B
Operating Cash Flow	283.04B	1.19T	724.19B	-257.95B	582.71B	1.04T
Investing Cash Flow	-1.02T	-921.72B	-597.42B	-952.41B	-611.83B	-303.35B
Financing Cash Flow	286.04B	757.47B	291.96B	1.49T	1.40T	808.11B

Rakuten Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 791.80
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4755, the sentiment is Negative. The current price of 791.8 is below the 20-day moving average (MA) of 807.48, below the 50-day MA of 812.22, and below the 200-day MA of 890.38, indicating a bearish trend. The MACD of -7.55 indicates Positive momentum. The RSI at 44.48 is Neutral, neither overbought nor oversold. The STOCH value of 21.28 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4755.

Rakuten Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4755	58 Neutral	$1.71T	―	-22.97%	―	10.38%	38.09%
Sector *	56 Neutral	HK$23.97B	4.08	-1.57%	8.88%	0.06%	-64.88%
ASKLF		$989.19M	15.47	11.70%	369.38%	―	―
MONOF		$9.84B	38.85	28.00%	1.37%	―	―
MRCIF		$2.97B	27.66	21.33%	―	―	―
SATLF		$9.45B	31.90	48.74%	2.27%	―	―
YMDAF		$2.59B	12.11	4.20%	2.81%	―	―

Rakuten Corporate Events

Rakuten Mobile and U-NEXT Forge Alliance for Enhanced Digital Offerings

Rakuten Mobile, a subsidiary of Rakuten Group, has entered into a business alliance with U-NEXT Co. to launch a new package called ‘Rakuten Saikyo U-NEXT.’ This package offers users unlimited mobile data and access to U-NEXT’s extensive content library for a monthly fee, enhancing the value proposition for customers and potentially boosting the corporate value of both companies. The collaboration aims to leverage the high service affinity between Rakuten’s mobile offerings and U-NEXT’s content distribution to expand user benefits and business growth.

The most recent analyst rating on (JP:4755) stock is a Hold with a Yen930.00 price target. To see the full list of analyst forecasts on Rakuten stock, see the JP:4755 Stock Forecast page.

Rakuten Group Announces Subsidiary Merger to Boost Efficiency

Rakuten Group, Inc. announced a merger of its subsidiaries, including Rakuten Mart, Rakuten Ticket, Rakuten Car, Rakuten STAY, and Monzen Corporation Japan, effective January 1, 2026. This merger aims to reduce administrative costs and improve operational efficiency, aligning with Rakuten’s strategy to enhance cost efficiency through AI and expand the Rakuten Ecosystem. The merger will not involve new share issuance or payments, as it involves wholly-owned subsidiaries.

The most recent analyst rating on (JP:4755) stock is a Hold with a Yen930.00 price target. To see the full list of analyst forecasts on Rakuten stock, see the JP:4755 Stock Forecast page.

Rakuten Reports Q1 2025 Financial Results: Revenue Growth Amidst Net Income Loss

Rakuten Group, Inc. reported its consolidated financial results for the first quarter of 2025, showing a revenue increase of 9.6% year-on-year to 562,704 million yen. Despite the revenue growth, the company faced a net income loss of 73,471 million yen, reflecting ongoing financial challenges. The company’s EBITDA saw a significant rise of 51.4% to 79,889 million yen, indicating strong cash flow generation capabilities. However, the total equity and equity ratio experienced a slight decline, highlighting potential concerns about financial stability. The dividend per share for the fiscal year 2025 remains undecided, maintaining the previously disclosed forecast.

The most recent analyst rating on (JP:4755) stock is a Hold with a Yen930.00 price target. To see the full list of analyst forecasts on Rakuten stock, see the JP:4755 Stock Forecast page.

Rakuten Securities Reports Positive Q1 2025 Financial Results

Rakuten Securities, Inc., a subsidiary of Rakuten Group, reported its financial results for the first quarter of 2025, showing a rise in operating revenue and income compared to the previous year. This financial performance indicates a positive trajectory for the company, potentially strengthening its position in the securities market and providing value to its stakeholders.

Rakuten Issues Share Options to Align Employee and Shareholder Interests

Rakuten Group, Inc. has announced the issuance of share options to its directors, executive officers, and employees as part of a performance-linked compensation package. This initiative aims to align the interests of the employees with shareholders by linking compensation to stock price performance, thereby motivating higher performance and retention of talent. The staged exercisability of these share options is designed to attract and retain skilled personnel, especially in competitive markets, while fostering a sense of unity and commitment to enhancing the company’s value.

Rakuten Issues Share Options to Align Executive Compensation with Performance

Rakuten Group, Inc. announced the issuance of share acquisition rights as retirement compensation for directors who also serve as executive officers. This initiative is designed to align the interests of the officers with shareholders by linking compensation to stock performance, thereby motivating higher performance and retention of talent. The share options can be exercised within ten days of retirement, aiming to enhance long-term corporate and shareholder value.

Rakuten Group’s Diversified Business Strategy and Market Positioning

Rakuten Group, Inc. has outlined its extensive business operations and strategic focus in its articles of incorporation. The company is involved in numerous sectors, ranging from telecommunications and financial services to real estate and entertainment, indicating its broad market presence and diversified business model. This strategic diversification is likely to enhance its market positioning and provide resilience against sector-specific downturns, benefiting stakeholders by potentially increasing stability and growth opportunities.

Rakuten Group’s Commitment to Diversity and Strategic Investment

Rakuten Group, Inc. emphasizes corporate governance with a focus on diversity and non-discrimination, adopting measures such as English as the official language and support for LGBTQ+ employees. The company classifies its investment shares based on their purpose, ensuring that investments contribute to shareholder value and are regularly reviewed by the Investment Committee.