Rakuten Bank, Ltd. Fundamental Analysis (JPX: 5838.T)
Rakuten Bank, Ltd. (JPX: 5838.T) shows strong financial fundamentals with a PE ratio of 14.70, profit margin of 28.83%, and ROE of 21.18%. The company generates $267.8B in annual revenue with strong year-over-year growth of 38.36%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 80.0/100 based on profitability, valuation, growth, and balance sheet metrics. The B+ grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze 5838.T's fundamental strength across five key dimensions:
Efficiency Score
Weak5838.T struggles to generate sufficient returns from assets.
Valuation Score
Excellent5838.T trades at attractive valuation levels.
Growth Score
Excellent5838.T delivers strong and consistent growth momentum.
Financial Health Score
Moderate5838.T shows balanced financial health with some risks.
Profitability Score
Excellent5838.T achieves industry-leading margins.
Key Financial Metrics
Is 5838.T Expensive or Cheap?
P/E Ratio
5838.T trades at 14.70 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, 5838.T's PEG of 0.41 indicates potential undervaluation.
Price to Book
The market values Rakuten Bank, Ltd. at 2.88 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 24.04 times EBITDA. This signals the market has high growth expectations.
How Well Does 5838.T Make Money?
Net Profit Margin
For every $100 in sales, Rakuten Bank, Ltd. keeps $28.83 as profit after all expenses.
Operating Margin
Core operations generate 40.84 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $21.18 in profit for every $100 of shareholder equity.
ROA
Rakuten Bank, Ltd. generates $0.47 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Rakuten Bank, Ltd. produces operating cash flow of $54.06B, showing steady but balanced cash generation.
Free Cash Flow
Rakuten Bank, Ltd. generates strong free cash flow of $52.56B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $301.21 in free cash annually.
FCF Yield
5838.T converts 4.63% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
14.70
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.41
vs 25 benchmark
P/B Ratio
Price to book value ratio
2.88
vs 25 benchmark
P/S Ratio
Price to sales ratio
4.24
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
5.76
vs 25 benchmark
Current Ratio
Current assets to current liabilities
120.07
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.21
vs 25 benchmark
ROA
Return on assets percentage
0.005
vs 25 benchmark
ROCE
Return on capital employed
0.007
vs 25 benchmark
How 5838.T Stacks Against Its Sector Peers
| Metric | 5838.T Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 14.70 | 21.10 | Better (Cheaper) |
| ROE | 21.18% | 658.00% | Weak |
| Net Margin | 28.83% | -1622.00% (disorted) | Strong |
| Debt/Equity | 5.76 | 0.92 | Weak (High Leverage) |
| Current Ratio | 120.07 | 927.98 | Strong Liquidity |
| ROA | 0.47% | -588.00% (disorted) | Weak |
5838.T outperforms its industry in 3 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Rakuten Bank, Ltd.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
132.70%
Industry Style: Value, Dividend, Cyclical
High GrowthEPS CAGR
256.16%
Industry Style: Value, Dividend, Cyclical
High GrowthFCF CAGR
122.45%
Industry Style: Value, Dividend, Cyclical
High Growth