Financial Analysis: Rakuten (RKUNY) & Its Peers

Rakuten (OTCMKTS:RKUNY) is one of 71 publicly-traded companies in the “INTERNET SERVICES” industry, but how does it contrast to its peers? We will compare Rakuten to related businesses based on the strength of its institutional ownership, analyst recommendations, risk, profitability, dividends, valuation and earnings.

Profitability

This table compares Rakuten and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Rakuten	-8.35%	-17.37%	-0.77%
Rakuten Competitors	-16.13%	-15.99%	0.94%

Institutional & Insider Ownership

42.1% of shares of all “INTERNET SERVICES” companies are held by institutional investors. 23.3% of shares of all “INTERNET SERVICES” companies are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Risk & Volatility

Rakuten has a beta of 1.04, indicating that its share price is 4% more volatile than the S&P 500. Comparatively, Rakuten’s peers have a beta of 2.60, indicating that their average share price is 160% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings for Rakuten and its peers, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rakuten	0	1	0	1	3.00
Rakuten Competitors	563	2439	5643	221	2.62

As a group, “INTERNET SERVICES” companies have a potential upside of 13.99%. Given Rakuten’s peers higher possible upside, analysts clearly believe Rakuten has less favorable growth aspects than its peers.

Earnings & Valuation

This table compares Rakuten and its peers gross revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Rakuten	$15.07 billion	-$1.07 billion	-9.32
Rakuten Competitors	$17.62 billion	$4.48 billion	10.74

Rakuten’s peers have higher revenue and earnings than Rakuten. Rakuten is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Summary

Rakuten peers beat Rakuten on 10 of the 13 factors compared.

About Rakuten

Rakuten Group, Inc. provides services in e-commerce, fintech, digital content, and communications to various users in Japan and internationally. The company operates through three segments: Internet Services, FinTech, and Mobile. The Internet Services segment provides range of e-commerce sites, such as Rakuten Ichiba, an Internet shopping mall, online cash-back sites, travel booking sites, portal sites, and digital content sites. It also offers messaging services and sells advertising; and manages professional sport teams. The FinTech segment offers financial services over the internet related to banking and securities, credit cards, life insurance, general insurance, electronic payment business, crypto asset (virtual currency) spot transaction, etc. The Mobile segment provides communication services and technology, electricity supply, and digital content site 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 Setagaya, Japan.