Rakuten Bank, Ltd. (5838) AI Stock Analysis

• Market Cap: ¥1.40T
• Dividend Yield: N/A
• Average Volume (3M): 1.33M
• Price to Earnings (P/E): 24.7
• Beta (1Y): 1.18
• Revenue Growth: 38.03%
• EPS Growth: 52.11%
• Country: JP
• Employees: 1,056
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Diversified
• EPS (TTM): 96.48
• Shares Outstanding: 174,498,470
• 10 Day Avg. Volume: 1,470,210
• 30 Day Avg. Volume: 1,327,986
• PEG Ratio: 0.47
• Price to Book (P/B): 3.71
• Price to Sales (P/S): 7.28
• P/FCF Ratio: 17.87
• 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: ¥8,674.00
• Price Target Upside: 11.51% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 4

• Rating: 62 Neutral
• Price Target: ¥8,246.00 ▲(6.00% Upside)

Rakuten Bank, Ltd. has a solid financial performance with strong revenue and profit growth, but high leverage is a concern. Technical indicators suggest a bearish short-term trend. The valuation is moderate, with no dividend yield to attract income investors. Overall, the stock is positioned for cautious optimism, but debt management remains critical.

Rakuten Bank, Ltd. Business Overview & Revenue Model

Company Description

Rakuten Bank, Ltd. provides internet banking products and services in Japan. The company offers personal services, including payment, money support/easy bank transfer, prepaid cards, Yen/foreign currency deposits, remittance, loan services, lottery, account linking, foreign exchange, and asset management services. It also provides corporate services, such as business debit cards, ATM deposit, business loans, international remittance, payment, transfer, account verification, withdrawal, settlement, and deposits services. Rakuten Bank, Ltd. was incorporated in 2000 and is based in Tokyo, Japan. Rakuten Bank, Ltd. operates as a subsidiary of Rakuten Group, Inc.

How the Company Makes Money

Rakuten Bank generates revenue through multiple streams, primarily from interest income earned on loans issued to customers, which includes personal loans, mortgages, and business loans. Additionally, the bank earns income from service fees associated with various banking operations, such as account maintenance fees and transaction fees. Another significant revenue source comes from credit card operations, where the bank receives fees from merchants for processing card transactions. The bank also benefits from partnerships with other financial institutions and businesses within the Rakuten ecosystem, enhancing cross-selling opportunities and increasing customer engagement. Furthermore, Rakuten Bank may generate income from investment activities and asset management services, contributing to its overall profitability.

Rakuten Bank, Ltd. Financial Statement Overview

Summary

Rakuten Bank, Ltd. exhibits strong revenue and profit growth, supported by robust operational margins. However, the high leverage poses potential financial risks. The cash flow position is improving, with strong cash generation relative to income. The company is on a positive growth trajectory, but careful management of debt levels is crucial to sustain financial stability.

Income Statement

Rakuten Bank, Ltd. has shown a strong revenue growth rate of 12.62% in the latest period, indicating robust top-line expansion. The net profit margin is healthy at 27.64%, reflecting efficient cost management. However, the gross profit margin is not available, which limits a full assessment of cost efficiency. The EBIT and EBITDA margins are strong, suggesting good operational performance.

Balance Sheet

The company has a high debt-to-equity ratio of 9.13, indicating significant leverage, which could pose financial risks. However, the return on equity is solid at 16.80%, showing effective use of equity to generate profits. The equity ratio is not provided, limiting the assessment of asset financing.

Cash Flow

Rakuten Bank, Ltd. has demonstrated a remarkable free cash flow growth rate, although the exact figure is not calculable due to previous negative cash flows. The operating cash flow to net income ratio is strong at 1.44, indicating good cash generation relative to net income. The free cash flow to net income ratio is nearly 1, showing efficient conversion of income to cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	161.26B	150.68B	124.28B	112.38B	100.84B	99.11B
Gross Profit	161.26B	123.55B	93.42B	80.53B	66.13B	64.31B
EBITDA	84.46B	77.90B	53.40B	43.28B	27.50B	30.55B
Net Income	56.69B	50.78B	34.44B	27.69B	20.04B	19.34B
Balance Sheet
Total Assets	15.25T	14.75T	13.48T	11.59T	9.49T	6.49T
Cash, Cash Equivalents and Short-Term Investments	0.00	4.24T	4.79T	4.05T	3.65T	2.68T
Total Debt	2.93T	2.76T	2.58T	2.29T	1.61T	663.20B
Total Liabilities	14.91T	14.43T	13.20T	11.36T	9.28T	6.30T
Stockholders Equity	323.36B	302.25B	260.69B	213.03B	187.08B	167.97B
Cash Flow
Free Cash Flow	0.00	62.83B	-404.89B	586.89B	1.46T	1.50T
Operating Cash Flow	0.00	63.41B	-403.58B	594.70B	-144.50B	1.50T
Investing Cash Flow	0.00	-1.83T	-301.06B	-193.58B	-495.98B	37.55B
Financing Cash Flow	0.00	1.22T	1.46T	1.40T	2.98T	2.59T

Rakuten Bank, Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 7779.00
• 50DMA: Negative
• 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:5838, the sentiment is Negative. The current price of 7779 is below the 20-day moving average (MA) of 8002.70, below the 50-day MA of 7984.42, and above the 200-day MA of 6484.06, indicating a neutral trend. The MACD of 13.18 indicates Positive momentum. The RSI at 46.23 is Neutral, neither overbought nor oversold. The STOCH value of 33.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:5838.

Rakuten Bank, Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
8473	77 Outperform	$2.23T	9.09	17.79%	2.51%	26.89%	150.74%
8600	77 Outperform	¥125.20B	7.69	―	3.36%	9.30%	2.14%
5831	74 Outperform	¥1.09T	14.27	―	3.01%	-1.35%	24.12%
8410	70 Neutral	¥276.20B	18.55	―	3.89%	4.01%	-42.81%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
7163	67 Neutral	―	―	―	―	23.73%	12.39%
5838	62 Neutral	¥1.40T	24.70	―	―	38.03%	52.11%

Rakuten Bank, Ltd. Corporate Events

Rakuten Bank Announces Shareholder Benefit Program for March 2025

Rakuten Bank, Ltd. has announced a shareholder benefit program for those holding 100 shares or more as of March 31, 2025. The program offers various financial incentives, such as increased interest rates on deposits and cashbacks on loans, aimed at enhancing shareholder value and engagement. This initiative reflects the company’s strategy to strengthen its market position and foster loyalty among its stakeholders.

Rakuten Bank Reports Strong Financial Growth for 2024

Rakuten Bank, Ltd. reported consolidated financial results for the nine months ending December 31, 2024, showing significant growth with a 30.3% increase in ordinary income and a 40.4% rise in ordinary profit compared to the previous year. This performance highlights the bank’s strong position in the industry and its successful strategies, which may positively impact its stakeholders and market presence.

Rakuten Bank Upgrades Financial Forecasts Amid Growth

Rakuten Bank, Ltd. has revised its financial forecasts for the fiscal year ending March 31, 2025, due to increased interest income and improved management efficiency. The bank anticipates higher ordinary income and profit, reflecting a positive shift in its financial performance and promising implications for stakeholders.