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Rakuten (JP:4755)
:4755
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Rakuten (4755) AI Stock Analysis

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JP:4755

Rakuten

(OTC:4755)

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Neutral 56 (OpenAI - 4o)
Rating:56Neutral
Price Target:
¥922.00
▼(-6.01% 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 (4755) vs. iShares MSCI Japan ETF (EWJ)

Rakuten Business Overview & Revenue Model

Company DescriptionRakuten 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 MoneyRakuten generates revenue through several key streams. The primary source is its e-commerce platform, where it earns income from transaction fees charged to merchants for selling products on its marketplace. Additionally, Rakuten operates a loyalty program, Rakuten Super Points, which enhances customer retention and drives sales. The company also has a significant presence in fintech, generating revenue through its banking and insurance services, where it earns fees and commissions from financial products. Furthermore, Rakuten provides digital content services, including streaming and subscription services, contributing to its revenue. Strategic partnerships, such as collaborations with major brands and expansion into international markets, also bolster its earnings.

Rakuten Earnings Call Summary

Earnings Call Date:Aug 08, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Nov 13, 2025
Earnings Call Sentiment Neutral
The earnings call reflects strong growth in revenue and EBITDA, driven by improvements across several segments, particularly in Mobile and FinTech. The launch of Rakuten AI and advancements in AI initiatives showcase the company's innovation. However, challenges remain with valuation losses in the Internet Services segment, financial issues related to taxation, and a reported net loss, balancing the positive aspects with notable concerns.
Q2-2025 Updates
Positive Updates
Record Growth in Revenue and EBITDA
Consolidated revenue increased by 11% YoY to JPY596.4 billion, and consolidated EBITDA increased significantly by 54.5% YoY, reaching JPY103.2 billion, marking the highest amount ever recorded for a Q2.
Strong Performance in Mobile Segment
Rakuten Mobile's stand-alone EBITDA improved by JPY19.1 billion YoY, reaching JPY5.6 billion, and the Mobile segment's revenue increased by 18.1% YoY to JPY112.1 billion.
Successful Launch of Rakuten AI
Rakuten AI was officially launched on July 30, expanding its services with the new Agentic AI service fully live across Japan, enhancing user experience.
FinTech Segment Growth
Segment revenue increased by 14.8% YoY to JPY232.7 billion, driven by expansion in Rakuten Card and Rakuten Bank.
Positive Developments in AI Initiatives
Enhancements in AI capabilities led to improved search and recommendation algorithms, resulting in significant increases in purchase volumes on Rakuten Ichiba and Rakuten Rakuma.
Negative Updates
Valuation Losses in Internet Services Segment
Non-GAAP operating income in the Internet Services segment declined by 10.5% YoY due to valuation losses on securities held in the minority investment business.
Financial Challenges Related to Taxation
Rakuten Card received a correction notice for consumption tax, resulting in JPY4.9 billion in expenses for additional taxes and delinquency charges.
Quarterly Net Loss
Despite strong revenue growth, the company reported a quarterly net loss of JPY40.1 billion, impacted by increased corporate income tax expenses and other financial factors.
Operating Income Still Negative in Mobile Segment
Despite improvements, the operating income for the Mobile segment remains negative.
Company Guidance
In the Q2 2025 call, Rakuten Group reported significant financial and operational progress across various segments. Rakuten Mobile achieved a stand-alone EBITDA of JPY5.6 billion, improving by JPY19.1 billion YoY, with a subscriber base reaching 9.08 million. The Group's consolidated revenue grew by 11% YoY to JPY596.4 billion, with notable contributions from the Internet Services, FinTech, and Mobile segments, which saw revenue increases of 6.8%, 14.8%, and 18.1%, respectively. Consolidated non-GAAP operating income rose by JPY31.9 billion YoY to JPY20.1 billion, marking the first Q2 profit since FY2019. Additionally, Rakuten launched its Rakuten AI and Agentic AI platform, enhancing user experience with personalized search and AI-driven advertising optimizations. The FinTech segment saw a 10.2% YoY increase in Rakuten Card shopping GTV to JPY6.5 trillion, while Rakuten Bank's accounts surpassed 17 million, reflecting robust growth in the customer base. The Mobile segment's revenue surged by 33.5% YoY to JPY90.6 billion, with improvements in network quality and innovative packages like the Rakuten Saikyo U-Next package. The call also highlighted Rakuten's issuance of sustainability bonds as part of its financial strategy to ensure medium-term stability and growth.

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
45
Neutral
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
40
Negative
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
55
Neutral
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue2.39T2.28T2.07T1.93T1.68T1.46T
Gross Profit335.55B316.29B790.31B585.31B542.63B562.57B
EBITDA385.81B289.41B146.60B-108.83B6.47B52.07B
Net Income-210.92B-162.44B-339.47B-375.91B-133.83B-114.20B
Balance Sheet
Total Assets26.28T26.51T22.63T20.44T16.83T12.52T
Cash, Cash Equivalents and Short-Term Investments5.38T6.17T5.13T4.86T4.69T3.30T
Total Debt5.31T5.46T4.80T4.91T3.40T2.49T
Total Liabilities25.14T25.28T21.54T19.57T15.71T11.90T
Stockholders Equity805.54B927.87B836.57B813.73B1.09T608.74B
Cash Flow
Free Cash Flow285.67B947.64B373.04B-697.36B172.07B656.32B
Operating Cash Flow348.39B1.19T724.19B-257.95B582.71B1.04T
Investing Cash Flow-975.48B-921.72B-597.42B-952.41B-611.83B-303.35B
Financing Cash Flow96.76B757.47B291.96B1.49T1.40T808.11B

Rakuten Technical Analysis

Technical Analysis Sentiment
Positive
Last Price981.00
Price Trends
50DMA
948.31
Positive
100DMA
872.67
Positive
200DMA
874.95
Positive
Market Momentum
MACD
12.55
Positive
RSI
61.08
Neutral
STOCH
61.28
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 981 is above the 20-day moving average (MA) of 975.71, above the 50-day MA of 948.31, and above the 200-day MA of 874.95, indicating a bullish trend. The MACD of 12.55 indicates Positive momentum. The RSI at 61.08 is Neutral, neither overbought nor oversold. The STOCH value of 61.28 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

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
$387.52B14.8131.21%2.79%92.79%
$1.15T25.2055.06%2.83%7.56%3.64%
$139.78B17.7610.61%2.70%1.69%-57.32%
¥385.48B12.484.25%2.82%1.26%12.77%
$938.16B32.0628.41%1.27%14.73%24.88%
$18.38B12.79-2.54%3.03%1.52%-15.83%
¥2.18T-25.86%11.07%23.91%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
JP:4755
Rakuten
1,004.50
81.80
8.87%
JP:2678
ASKUL
1,410.00
-474.82
-25.19%
JP:3064
MonotaRO Co
1,994.00
-302.95
-13.19%
JP:4385
Mercari
2,287.50
128.00
5.93%
JP:3092
ZOZO
1,316.50
-298.53
-18.48%
JP:9831
Yamada Denki Co
465.80
40.38
9.49%

Rakuten Corporate Events

Rakuten Issues Unsecured Undated Bonds to Enhance Financial Flexibility
Oct 17, 2025

Rakuten Group, Inc. has announced the issuance of unsecured undated bonds with interest payment deferral and optional redemption clauses, structured to receive a 50% equity credit from rating agencies. The proceeds from these bonds will be used to redeem or repurchase existing USD-denominated subordinated notes, enhancing Rakuten’s financial flexibility and potentially strengthening its market position.

The most recent analyst rating on (JP:4755) stock is a Hold with a Yen850.00 price target. To see the full list of analyst forecasts on Rakuten stock, see the JP:4755 Stock Forecast page.

Rakuten Group Issues Share Options to Subsidiary Employees
Oct 16, 2025

Rakuten Group, Inc. has announced the issuance of share options to employees of its subsidiaries as part of a performance-linked compensation package. This initiative aims to align employee interests with shareholder gains, enhance motivation, and retain talent by offering share acquisition rights that are exercisable in stages over several years. The move is designed to boost corporate and shareholder value by fostering a sense of unity among employees and making them potential shareholders.

The most recent analyst rating on (JP:4755) stock is a Hold with a Yen850.00 price target. To see the full list of analyst forecasts on Rakuten stock, see the JP:4755 Stock Forecast page.

Rakuten Faces Impairment Loss Amid Online Grocery Challenges
Oct 3, 2025

Rakuten Group, Inc. announced an expected impairment loss of approximately 27 billion yen in its financial statements for the third quarter of 2025. This follows challenges in its online grocery delivery service, Rakuten Mart, due to slower-than-expected customer acquisition and a shift back to physical stores post-pandemic. The company plans to improve profitability by enhancing its loyalty program, expanding product offerings, and optimizing logistics, while withdrawing from unprofitable areas.

The most recent analyst rating on (JP:4755) stock is a Hold with a Yen850.00 price target. To see the full list of analyst forecasts on Rakuten stock, see the JP:4755 Stock Forecast page.

Rakuten Partners with U-NEXT for New Digital Content Package
Oct 1, 2025

Rakuten Group, Inc. has announced a business alliance between its subsidiary Rakuten Mobile, Inc. and U-NEXT Co., Ltd., launching a new package called ‘Rakuten Saikyo U-NEXT’. This package allows users to access U-NEXT’s content with unlimited data, potentially enhancing Rakuten’s market position in digital content distribution. The financial impact of this alliance is still under review, with further disclosures to be made as necessary.

The most recent analyst rating on (JP:4755) stock is a Hold with a Yen850.00 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 2018 Subordinated Bonds
Sep 16, 2025

Rakuten Group, Inc. has announced the early redemption of its 2nd unsecured subordinated bonds, originally issued in 2018, with a total redemption amount of JPY 19.2 billion. This strategic financial move, set to occur on December 13, 2025, reflects Rakuten’s proactive approach to managing its financial obligations and could enhance its financial flexibility, potentially impacting its market positioning and stakeholder confidence.

The most recent analyst rating on (JP:4755) stock is a Hold with a Yen850.00 price target. To see the full list of analyst forecasts on Rakuten stock, see the JP:4755 Stock Forecast page.

Rakuten’s Earnings Call: Strong Growth Amid Challenges
Aug 13, 2025

The recent earnings call from Rakuten painted a picture of robust performance, marked by substantial revenue and EBITDA growth across various segments, particularly in Mobile and FinTech. Despite these achievements, the company faced hurdles with valuation losses, tax complications, and a quarterly net loss, which tempered the overall positive sentiment.

Rakuten Reports Revenue Growth Amidst Continued Losses
Aug 9, 2025

Rakuten Group, Inc., a leading Japanese e-commerce and internet services company, operates across various sectors including FinTech and mobile communications, providing a wide range of services from online shopping to financial services. In its latest earnings report for the first half of 2025, Rakuten reported a 10.3% increase in revenue year-on-year, reaching ¥1,159,073 million, despite facing a net loss of ¥124,435 million. The company highlighted significant growth in its FinTech and Mobile segments, with the FinTech segment seeing a 15.2% increase in revenue and the Mobile segment reducing its losses significantly. However, the company continues to face challenges in achieving profitability, as reflected in its operating loss of ¥6,610 million under IFRS standards. Looking ahead, Rakuten aims for double-digit revenue growth for the full fiscal year 2025, excluding its securities business, and targets achieving profitability in Non-GAAP operating income, focusing on expanding its customer base and enhancing its service offerings across its diverse business segments.

Rakuten Reports Increased Revenue but Faces Financial Challenges in H1 2025
Aug 8, 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
Aug 7, 2025

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
Jul 29, 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.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 29, 2025