Rakuten (4755) AI Stock Analysis

• Market Cap: $1.73T
• Dividend Yield: N/A
• Average Volume (3M): 14.59M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.18
• Revenue Growth: 10.38%
• EPS Growth: 38.09%
• Country: JP
• Employees: 29,334
• Sector: Consumer Cyclical
• Sector Strength: 72
• Industry: Specialty Retail
• EPS (TTM): -23.56
• Shares Outstanding: 2,164,425,800
• 10 Day Avg. Volume: 16,196,180
• 30 Day Avg. Volume: 14,589,740
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.15
• Enterprise Value/Revenue: 0.85
• Enterprise Value/Gross Profit: 6.44
• Enterprise Value/Ebitda: 4.48
• 1Y Price Target: $960.24
• Price Target Upside: 19.95% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5

• Rating: 53 Neutral
• Price Target: ¥805.00 ▲(0.56% Upside)

Rakuten's overall stock score is primarily influenced by its financial performance, which shows moderate growth but significant profitability challenges and high leverage. The earnings call provided a positive outlook with record revenues and strategic advancements, particularly in AI initiatives. However, valuation concerns due to negative earnings and the absence of dividends weigh down the score. Technical analysis indicates a neutral trend, with no strong bullish or bearish signals.

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 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 is experiencing moderate revenue growth but faces significant profitability challenges, as reflected in its income statement. The balance sheet indicates high leverage, posing financial risks, while the cash flow statement shows declining free cash flow, although the company manages to maintain positive operating cash flow.

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

Rakuten Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 800.50
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• 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 800.5 is above the 20-day moving average (MA) of 782.48, above the 50-day MA of 792.98, and below the 200-day MA of 865.94, indicating a neutral trend. The MACD of -2.84 indicates Negative momentum. The RSI at 55.40 is Neutral, neither overbought nor oversold. The STOCH value of 77.52 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
Sector *	61 Neutral	$17.42B	9.39	-9.60%	3.22%	1.73%	-21.40%
4755	53 Neutral	$1.73T	―	-25.86%	―	10.38%	38.09%
ASKLF	―	$1.02B	15.71	11.66%	―	―	―
MONOF	―	$9.19B	35.97	28.41%	1.58%	―	―
MRCIF	―	$2.39B	14.74	31.21%	―	―	―
SATLF	―	$9.25B	30.38	55.06%	2.47%	―	―
YMDAF	―	$2.57B	12.46	4.25%	2.78%	―	―

Rakuten Corporate Events

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.