Contrasting Rakuten (RKUNY) and Its Peers

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

Institutional & Insider Ownership

42.4% of shares of all “INTERNET SERVICES” companies are owned by institutional investors. 23.7% of shares of all “INTERNET SERVICES” companies are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Risk and Volatility

Rakuten has a beta of 1.04, meaning that its share price is 4% more volatile than the S&P 500. Comparatively, Rakuten’s peers have a beta of 2.61, meaning that their average share price is 161% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and target prices for Rakuten and its peers, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rakuten	0	1	0	1	3.00
Rakuten Competitors	564	2441	5655	221	2.62

As a group, “INTERNET SERVICES” companies have a potential upside of 14.04%. Given Rakuten’s peers higher possible upside, analysts plainly 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	-9.02
Rakuten Competitors	$19.41 billion	$4.48 billion	11.20

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.

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	-16.77%	-17.48%	0.69%

Summary

Rakuten peers beat Rakuten on 9 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.