Rakuten Bank, Ltd. (5838) AI Stock Analysis

• Market Cap: ¥1.40T
• Dividend Yield: N/A
• Average Volume (3M): 1.77M
• Price to Earnings (P/E): 24.4
• Beta (1Y): 1.18
• Revenue Growth: 38.03%
• EPS Growth: 52.11%
• Country: JP
• Employees: 1,056
• Sector: Financial
• Sector Strength: 77
• Industry: Banks - Diversified
• EPS (TTM): 96.48
• Shares Outstanding: 174,498,180
• 10 Day Avg. Volume: 1,232,160
• 30 Day Avg. Volume: 1,767,830
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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: ¥8,620.20
• Price Target Upside: 8.76% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5

• Rating: 71 Outperform
• Price Target: ¥9,311.00 ▲(17.47% Upside)

Rakuten Bank, Ltd. scores well due to strong financial performance and positive technical indicators. The company's robust revenue and profit growth, along with bullish market momentum, are significant strengths. However, the high P/E ratio and lack of dividend yield present valuation concerns. The absence of earnings call insights and corporate events does not impact the score.

Rakuten Bank, Ltd. Business Overview & Revenue Model

Company Description

Rakuten Bank, Ltd. (5838) is a leading online bank based in Japan, operating as a subsidiary of Rakuten Group, Inc. The bank primarily focuses on providing a wide range of financial services, including personal and business banking products, savings accounts, loans, credit cards, and investment services. Leveraging technology and digital innovation, Rakuten Bank aims to offer convenient and user-friendly banking solutions to its customers, catering to both individual and corporate clients in the rapidly evolving financial landscape.

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	152.36B	154.22B	124.28B	112.38B	100.84B	99.11B
Gross Profit	148.44B	154.22B	93.42B	80.53B	100.84B	99.11B
EBITDA	73.19B	73.19B	53.40B	43.28B	31.86B	30.55B
Net Income	50.78B	50.78B	34.44B	27.69B	20.04B	19.34B
Balance Sheet
Total Assets	14.75T	14.75T	13.48T	11.59T	9.49T	6.49T
Cash, Cash Equivalents and Short-Term Investments	4.24T	4.24T	4.79T	4.05T	3.65T	2.68T
Total Debt	2.76T	2.76T	2.58T	2.29T	1.61T	663.20B
Total Liabilities	14.43T	14.43T	13.20T	11.36T	9.28T	6.30T
Stockholders Equity	302.25B	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	1.46T	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: Neutral
• Last Price: 7926.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 Neutral. The current price of 7926 is below the 20-day moving average (MA) of 8225.85, above the 50-day MA of 7309.32, and above the 200-day MA of 5976.05, indicating a neutral trend. The MACD of 213.90 indicates Positive momentum. The RSI at 50.69 is Neutral, neither overbought nor oversold. The STOCH value of 16.53 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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	77 Outperform	¥123.11B	7.56		2.47%	9.30%	2.14%
5838	71 Outperform	¥1.40T	24.39		―	38.03%	52.11%
Sector *	68 Neutral	$18.06B	11.97	10.24%	3.74%	9.75%	1.30%
SBHGF	―	$16.30B	9.24	17.79%	2.48%	―	―
5831	74 Outperform	¥1.06T	13.88		3.09%	-1.35%	24.12%
8410	70 Neutral	¥282.45B	18.79		3.82%	4.01%	-42.81%
7163	67 Neutral	¥734.93B	26.75		0.39%	23.73%	12.39%

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.