Rakuten Bank, Ltd. (5838) AI Stock Analysis

• Market Cap: ¥1.23T
• Dividend Yield: N/A
• Average Volume (3M): 1.32M
• Price to Earnings (P/E): 19.6
• Beta (1Y): 1.21
• Revenue Growth: 41.15%
• EPS Growth: 54.73%
• Country: JP
• Employees: 1,056
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Diversified
• EPS (TTM): 98.41
• Shares Outstanding: 174,498,670
• 10 Day Avg. Volume: 1,435,070
• 30 Day Avg. Volume: 1,322,350
• PEG Ratio: 0.47
• Price to Book (P/B): 3.71
• Price to Sales (P/S): 7.45
• 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: ¥8,440.00
• Price Target Upside: 19.73% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 59 Neutral
• Price Target: ¥7,958.00 ▲(12.90% Upside)

Rakuten Bank, Ltd.'s overall stock score is primarily influenced by its strong financial performance, characterized by robust revenue and profit growth. However, the high leverage and bearish technical indicators weigh down the score. The valuation is moderate, but the lack of a dividend yield reduces its appeal to income investors. The absence of recent earnings call insights and corporate events means these factors do not influence the score.

Positive Factors

Revenue Growth

The strong revenue growth rate indicates robust top-line expansion, suggesting effective market penetration and product adoption, which can enhance long-term financial performance.

Profitability

A healthy net profit margin demonstrates effective cost management and operational efficiency, which supports sustainable profitability and competitive positioning.

Cash Generation

Strong cash generation relative to net income indicates efficient income conversion to cash, enhancing financial flexibility and supporting growth initiatives.

Negative Factors

High Leverage

High leverage can pose financial risks by increasing interest obligations and reducing financial flexibility, potentially impacting long-term stability.

Limited Dividend Appeal

Without a dividend yield, the company may be less appealing to income investors, potentially limiting its investor base and impacting stock demand.

Equity Ratio Uncertainty

Lack of equity ratio data hinders a complete assessment of the company's financial structure, potentially obscuring risk levels related to asset financing.

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 various channels, primarily from interest income on loans and fees associated with banking services. The bank offers personal and business loans, earning interest from borrowers. Additionally, it charges fees for services such as account maintenance, transaction processing, and foreign exchange transactions. The bank also earns revenue from its credit card operations, including annual fees and interest on outstanding balances. Strategic partnerships with other fintech companies and e-commerce platforms within the Rakuten ecosystem enhance its customer base and revenue potential, as they enable cross-selling opportunities and integrated financial services.

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: 7049.00
• 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:5838, the sentiment is Negative. The current price of 7049 is below the 20-day moving average (MA) of 7174.40, below the 50-day MA of 7644.48, and below the 200-day MA of 7065.48, indicating a bearish trend. The MACD of -152.83 indicates Positive momentum. The RSI at 44.37 is Neutral, neither overbought nor oversold. The STOCH value of 20.71 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
8600	76 Outperform	¥144.96B	11.46	―	2.88%	9.68%	-21.05%
5831	73 Outperform	¥1.33T	15.39	―	3.03%	9.16%	29.12%
8473	72 Outperform	$2.18T	7.21	20.02%	2.73%	23.96%	179.16%
8410	70 Neutral	¥293.96B	19.07	―	3.65%	3.30%	79.42%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
7163	67 Neutral	―	―	―	―	23.73%	12.39%
5838	59 Neutral	¥1.23T	19.64	―	―	41.15%	54.73%

Rakuten Bank, Ltd. Corporate Events

Rakuten Bank Reports Strong Financial Growth for First Half of 2025

Rakuten Bank, Ltd. reported a significant increase in its financial performance for the six months ended September 30, 2025, with ordinary income rising by 41.4% and profit attributable to owners of the parent increasing by 53.5% compared to the previous year. This robust growth reflects the bank’s strong market positioning and effective operational strategies, which are likely to positively impact its stakeholders and enhance its competitive edge in the financial sector.