Rakuten (4755) AI Stock Analysis

• Market Cap: $2.09T
• Dividend Yield: N/A
• Average Volume (3M): 15.99M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.18
• Revenue Growth: 11.07%
• EPS Growth: 23.91%
• Country: JP
• Employees: 29,334
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Specialty Retail
• EPS (TTM): -23.56
• Shares Outstanding: 2,166,339,600
• 10 Day Avg. Volume: 13,106,550
• 30 Day Avg. Volume: 15,987,946
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.95
• Enterprise Value/Revenue: 0.83
• Enterprise Value/Gross Profit: 5.93
• Enterprise Value/Ebitda: 5.15
• 1Y Price Target: $921.43
• Price Target Upside: -5.60% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 56 Neutral
• Price Target: ¥922.00 ▼(-5.54% Downside)

Rakuten's overall stock score is driven by its financial performance challenges, particularly in profitability and high leverage, which weigh heavily on the score. Positive technical indicators and strong earnings call results, highlighting growth in key segments and innovation, provide some support. However, the negative valuation metrics and absence of a dividend yield limit the stock's attractiveness.

Rakuten Business Overview & Revenue Model

Company Description

Rakuten, Inc., headquartered in Tokyo, Japan, is a leading global innovation company that operates in various sectors including e-commerce, financial services, digital content, and telecommunications. The company is best known for its online marketplace, Rakuten Ichiba, which is one of the largest e-commerce platforms in Japan. Rakuten also provides a wide range of services such as Rakuten Card, Rakuten Bank, and Rakuten Securities in its financial division, along with digital content offerings like Rakuten Viki and Kobo, and its telecommunications service Rakuten Mobile.

How the Company Makes Money

Rakuten generates revenue through a diverse portfolio of businesses. The company’s primary revenue stream comes from its e-commerce platform, Rakuten Ichiba, where it earns through transaction fees from merchants and advertising services. In the financial services sector, Rakuten makes money through interest income, transaction fees, and commissions from its banking, securities, and credit card services. Additionally, Rakuten's digital content services such as Kobo and Viki contribute through subscription fees and digital content sales. In telecommunications, Rakuten Mobile provides revenue through mobile subscription fees. Partnerships and collaborations with various businesses also play a significant role in enhancing its revenue streams by integrating services and expanding its customer base.

Rakuten Financial Statement Overview

Summary

Rakuten faces challenges with profitability and high leverage, as seen in its income statement and balance sheet. While revenue is growing, the company struggles with negative margins and high debt levels. However, the cash flow statement provides a positive note with strong free cash flow growth, indicating potential for future financial improvement if profitability issues are addressed.

Income Statement

Rakuten's income statement shows a modest revenue growth rate of 2.54% TTM, indicating some expansion. However, the company is struggling with profitability, as evidenced by a negative net profit margin of -8.31% TTM. The gross profit margin has decreased over time, and the EBIT margin is relatively low at 4.19% TTM, suggesting challenges in cost management and operational efficiency.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 6.42 TTM, indicating significant leverage and potential financial risk. The return on equity is negative at -23.44% TTM, reflecting ongoing losses. The equity ratio is low, suggesting limited financial stability and a heavy reliance on debt financing.

Cash Flow

Rakuten's cash flow statement shows a strong free cash flow growth rate of 64.09% TTM, indicating improved cash generation. The operating cash flow to net income ratio is 0.57 TTM, which is moderate, and the free cash flow to net income ratio is 0.62 TTM, suggesting some efficiency in converting income into cash flow despite net losses.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.39T	2.28T	2.07T	1.93T	1.68T	1.46T
Gross Profit	335.55B	316.29B	790.31B	585.31B	542.63B	562.57B
EBITDA	385.81B	289.41B	146.60B	-108.83B	6.47B	52.07B
Net Income	-210.92B	-162.44B	-339.47B	-375.91B	-133.83B	-114.20B
Balance Sheet
Total Assets	26.28T	26.51T	22.63T	20.44T	16.83T	12.52T
Cash, Cash Equivalents and Short-Term Investments	5.38T	6.17T	5.13T	4.86T	4.69T	3.30T
Total Debt	5.31T	5.46T	4.80T	4.91T	3.40T	2.49T
Total Liabilities	25.14T	25.28T	21.54T	19.57T	15.71T	11.90T
Stockholders Equity	805.54B	927.87B	836.57B	813.73B	1.09T	608.74B
Cash Flow
Free Cash Flow	285.67B	947.64B	373.04B	-697.36B	172.07B	656.32B
Operating Cash Flow	348.39B	1.19T	724.19B	-257.95B	582.71B	1.04T
Investing Cash Flow	-975.48B	-921.72B	-597.42B	-952.41B	-611.83B	-303.35B
Financing Cash Flow	96.76B	757.47B	291.96B	1.49T	1.40T	808.11B

Rakuten Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 976.10
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 Positive. The current price of 976.1 is above the 20-day moving average (MA) of 959.86, above the 50-day MA of 893.37, and above the 200-day MA of 869.92, indicating a bullish trend. The MACD of 16.68 indicates Positive momentum. The RSI at 60.99 is Neutral, neither overbought nor oversold. The STOCH value of 75.45 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4755.

Rakuten Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2678	71 Outperform	$150.67B	19.15	10.61%	2.41%	1.69%	-57.32%
3092	69 Neutral	$1.20T	26.28	55.06%	2.66%	7.56%	3.64%
9831	68 Neutral	$393.68B	12.44	4.25%	2.76%	1.26%	12.77%
4385	66 Neutral	$363.73B	13.96	31.21%	―	2.79%	92.79%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
3064	61 Neutral	$1.07T	36.65	28.41%	1.15%	14.73%	24.88%
4755	56 Neutral	$2.09T	―	-25.86%	―	11.07%	23.91%

Rakuten Corporate Events

Rakuten Reports Increased Revenue but Faces Financial Challenges in H1 2025

Rakuten Group, Inc. reported its consolidated financial results for the six months ending June 30, 2025, showing a 10.3% increase in revenue compared to the previous year. However, the company faced significant losses with a net income of negative 124,435 million yen, reflecting ongoing challenges in its financial performance. Despite these losses, the company’s EBITDA increased by 53.1%, indicating improved cash flow generation ability. The financial position showed a slight decrease in total assets and equity, with no dividends declared for the period, highlighting a cautious approach amidst financial uncertainties.

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 Announces Early Redemption of 2020 Subordinated Bonds

Rakuten Group, Inc. has announced the early redemption of its 4th unsecured subordinated bonds, initially issued in 2020, with a total redemption amount of JPY 16.8 billion. This strategic financial move reflects the company’s proactive management of its debt obligations, potentially strengthening its financial position and signaling confidence in its operational stability to stakeholders.

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 Increased Revenue but Declining Net Income for H1 2025

Rakuten Securities, Inc. announced its interim financial results for the first half of 2025, reporting an increase in operating revenue to 70,627 million yen compared to the same period in 2024. Despite the rise in revenue, net income decreased significantly to 5,584 million yen, indicating potential challenges in cost management or market conditions.

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 Implements Share Options for Enhanced Employee Engagement

Rakuten Group, Inc. announced the issuance of Share Acquisition Rights as part of a performance-linked compensation package for its subsidiaries’ directors, executive officers, and employees. This initiative aims to align the interests of employees with shareholders by linking compensation to stock performance, thereby enhancing motivation and retention of talent in competitive markets. The phased exercise of these rights is designed to foster long-term commitment and performance improvement, contributing to the company’s strategic goals of expanding its ecosystem and increasing shareholder value.

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 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.