Rakuten Bank, Ltd. (5838) AI Stock Analysis

• Market Cap: ¥1.09T
• Dividend Yield: N/A
• Average Volume (3M): 1.32M
• Price to Earnings (P/E): 15.8
• Beta (1Y): 1.03
• Revenue Growth: 41.15%
• EPS Growth: 54.73%
• Country: JP
• Employees: 1,056
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Diversified
• EPS (TTM): 109.52
• Shares Outstanding: 174,498,780
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 398.09
• Revenue Forecast (FY): ¥202.52B

• Rating: 60 Neutral
• Price Target: ¥6,681.00 ▼(-25.12% Downside)
• Action: Reiterated Date: 02/28/26
• Date: Action: Reiterated 02/28/26

The score is supported by strong profitability and cash generation, but is held back by high leverage and a clearly bearish technical trend (price below all major moving averages with weak momentum). Valuation appears reasonable based on P/E, though the lack of dividend yield data limits the valuation view.

Positive Factors

Sustained Revenue Growth

Consistent double-digit revenue growth indicates expanding customer adoption and product uptake. Over 2-6 months this supports reinvestment in digital platforms and product expansion, improving scale economics and making top-line driven strategic initiatives more sustainable.

High Profitability and Cash Conversion

Elevated net margins combined with strong operating cash conversion signal durable earnings quality. Reliable cash generation provides buffer for credit cycles, funds for technology investment, and supports capital needs without immediate reliance on external funding.

Ecosystem-driven Distribution Advantage

Integration with the broader Rakuten ecosystem creates a structural customer acquisition and cross-sell channel. This lowers acquisition costs, increases product attachment rates, and deepens customer relationships, supporting sustainable deposit and fee growth over time.

Negative Factors

Very High Leverage

A debt-to-equity ratio above 9 materially raises financial risk. Over the medium term this increases sensitivity to rate moves, raises refinancing and interest burdens, constrains capital allocation flexibility, and heightens vulnerability to economic or credit shocks.

Limited Balance Sheet Transparency

Missing equity-ratio data and gaps in balance-sheet detail hinder clear assessment of capital adequacy and funding mix. This reduces visibility into regulatory capital buffers and reliance on wholesale funding, complicating risk management and planning over multiple quarters.

Revenue Concentration and Business Risk

Heavy reliance on interest income and group-driven cross-sell concentrates exposure to credit cycles and any weakening in the Rakuten ecosystem. Structural shifts in consumer credit demand or tighter fintech regulation could compress margins and growth sustainably.

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

Strong revenue growth (12.62%) and a healthy net profit margin (27.64%) support a solid operating profile, and cash generation is strong (operating cash flow to net income at 1.44). The main offset is high leverage (debt-to-equity 9.13), which increases financial risk despite solid ROE (16.80%).

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	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
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: 8922.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 8922 is above the 20-day moving average (MA) of 8083.25, above the 50-day MA of 7424.20, and above the 200-day MA of 7443.53, indicating a bearish trend. The MACD of 49.11 indicates Positive momentum. The RSI at 32.59 is Neutral, neither overbought nor oversold. The STOCH value of 5.28 is Positive, 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	72 Outperform	¥2.11T	5.19	20.02%	2.63%	23.96%	179.16%
8410	70 Neutral	¥288.01B	27.26	―	3.66%	3.30%	79.42%
8572	69 Neutral	¥797.25B	14.90	7.91%	3.48%	6.65%	-4.35%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
8570	66 Neutral	¥367.35B	23.34	3.05%	3.04%	10.31%	-40.64%
5838	60 Neutral	¥1.09T	15.83	―	―	41.15%	54.73%
8698	43 Neutral	¥183.55B	21.40	-3.97%	4.16%	14.69%	-114.36%

Rakuten Bank, Ltd. Corporate Events

Rakuten Bank to Launch Expanded Shareholder Benefit Program for March 2026 Record Date

Rakuten Bank, Ltd. has announced a shareholder benefit program for investors holding at least 100 shares as of March 31, 2026, granting preferential terms on selected banking products in Japan. Eligible individual shareholders, excluding certain branch and business accounts, can access enhanced interest on yen fixed-term deposits, cashbacks on foreign currency and dual deposits, and rebates on home loan administrative fees.

The program simplifies previous offerings by removing three Rakuten Ext Deposit products, while increasing some bonuses for salary receivers who have pay credited to Rakuten Bank accounts in May 2026. Details and application instructions will be sent with the June 2026 annual meeting notice, and the bank frames the move as part of an ongoing effort to improve shareholder rewards and deepen engagement with its retail customer base.

The most recent analyst rating on (JP:5838) stock is a Buy with a Yen10082.00 price target. To see the full list of analyst forecasts on Rakuten Bank, Ltd. stock, see the JP:5838 Stock Forecast page.

Rakuten Bank to Boost Capital at Taiwanese Digital Banking Unit

Rakuten Bank will inject additional capital into its consolidated subsidiary, Rakuten International Commercial Bank in Taiwan, to strengthen the unit’s capital base and support operational expansion. The planned increase of TWD 1.4 billion, expected around July 2026 subject to local regulatory approvals and shareholder decisions, will keep Rakuten Bank’s ownership at 50% and is projected to have only a minor impact on the parent company’s overall financial position.

The move underscores Rakuten Bank’s commitment to growing its international electronic banking footprint, particularly in the Taiwanese market where RICB operates as a key digital banking platform. By reinforcing the subsidiary’s financial foundation in coordination with other shareholders, Rakuten Bank aims to enhance RICB’s management capabilities and position it for future business growth while maintaining stable capital efficiency at the group level.

The most recent analyst rating on (JP:5838) stock is a Buy with a Yen10082.00 price target. To see the full list of analyst forecasts on Rakuten Bank, Ltd. stock, see the JP:5838 Stock Forecast page.

Rakuten Bank Taps Veteran Lawyer as New Outside Director

Rakuten Bank has nominated prominent lawyer Satoshi Kawai as a new outside director, to be put to a shareholder vote at the 27th Annual General Shareholders’ Meeting scheduled for June 2026. The move follows the planned retirement of outside director Eiji Ebinuma at the conclusion of the same meeting.

Kawai brings extensive legal and governance experience, including long-standing partnership at major law firm Mori Hamada & Matsumoto and roles on government and arbitration bodies. His appointment is expected to strengthen the bank’s governance framework and advisory capabilities as it navigates regulatory and strategic challenges in Japan’s competitive online banking sector.

The most recent analyst rating on (JP:5838) stock is a Buy with a Yen10082.00 price target. To see the full list of analyst forecasts on Rakuten Bank, Ltd. stock, see the JP:5838 Stock Forecast page.

Rakuten Bank Lifts Earnings Outlook on Strong Nine-Month Profit Surge

Rakuten Bank reported strong growth for the nine months ended December 31, 2025, with ordinary income rising 39.1% year on year to ¥183.3 billion and profit attributable to owners of the parent climbing 50.9% to ¥53.1 billion. Total assets expanded to ¥16.9 trillion while own capital increased, keeping the own capital ratio at 2.0%, and earnings per share improved significantly.

Despite the robust earnings, the bank maintained its stance of paying no dividends for the current fiscal year, signaling a continued focus on capital retention and business expansion. The lender also raised its full-year forecast, now expecting double-digit growth in ordinary income, ordinary profit and net profit, underlining confidence in its operating momentum and reinforcing its position in Japan’s competitive online banking sector.

The most recent analyst rating on (JP:5838) stock is a Hold with a Yen8075.00 price target. To see the full list of analyst forecasts on Rakuten Bank, Ltd. stock, see the JP:5838 Stock Forecast page.

Rakuten Bank Raises Full-Year Earnings Forecast on Higher Interest Income and Efficiency Gains

Rakuten Bank has revised upward its consolidated earnings forecast for the fiscal year ending March 31, 2026, citing stronger-than-expected performance. The bank now projects ordinary income of ¥254.4 billion and profit attributable to owners of parent of ¥71.3 billion, with profit per share rising to ¥408.41.

The revisions represent year-on-year growth from fiscal 2025 and an 11.0% upgrade to the previous ordinary profit forecast announced in May 2025. Management attributes the improvement to increased interest income on loans and monetary claims and greater operational efficiency as the business scale expands, signaling stronger profitability and potentially enhanced returns for shareholders.

The most recent analyst rating on (JP:5838) stock is a Hold with a Yen8075.00 price target. To see the full list of analyst forecasts on Rakuten Bank, Ltd. stock, see the JP:5838 Stock Forecast page.

Rakuten Bank Issues Employee Stock Options to Strengthen Long-Term Incentives

Rakuten Bank’s board has approved the issuance of stock acquisition rights as stock options to 316 employees, covering up to 31,900 common shares, as part of a long-term incentive program tied to the bank’s share price. The options, which require no cash payment on grant and are exercisable over a 10-year period starting one year after issuance, will vest gradually until the fourth anniversary, a structure designed both to attract new talent and to retain existing high-performing employees by linking their compensation directly to the bank’s performance and stock price over the long term.

The most recent analyst rating on (JP:5838) stock is a Hold with a Yen6954.00 price target. To see the full list of analyst forecasts on Rakuten Bank, Ltd. stock, see the JP:5838 Stock Forecast page.