Original Coverage & Source Attribution: simplywall.st
FinTech shake up puts Rakuten Group in focus
Rakuten Group (TSE:4755) has completed a major reshuffle of its FinTech arm, with Rakuten Card and Rakuten Securities Holdings now placed under Rakuten Bank as consolidated subsidiaries.
The overhaul involved transfers of businesses and assets within the group and is expected to trigger around ¥23b of income tax expense in Rakuten Group’s third quarter results for the 2026 financial year.
Rakuten Group shares closed at ¥650.2, with a 1-day share price return of 1.66% after the FinTech reshuffle, although the 30-day share price return is down 11.66% and the year-to-date share price return is down 35.24%. Over a longer stretch, the total shareholder return is down 33.40% over one year and down 41.99% over five years, while the 3-year total shareholder return of 8.06% points to momentum that has been mixed across different holding periods.
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Rakuten Group has a reshaped FinTech structure, a ¥650.2 share price, and wide gaps between market value, analyst targets and intrinsic estimates. Where does fair value actually line up now?
Most Popular Narrative: 27% Undervalued
On the most followed view of Rakuten Group, a fair value of ¥895.4 against a ¥650.2 share price points to a wide valuation gap that this FinTech reshuffle throws into sharper focus.
Rakuten Mobile is achieving rapid growth in subscribers, expected to drive the growth of the entire Rakuten ecosystem, contributing significantly to future revenue increases through cross-selling of Rakuten services to mobile users.
AI-driven operational efficiencies, targeting a 31% reduction in customer support costs, are anticipated to improve net margins by boosting profitability across Rakuten’s operational segments.
See why 5 investors see Rakuten Group as 27% undervalued.
According to this popular narrative, analysts tie that ¥895.4 fair value to a long term revenue growth assumption of 7.52%, a projected profit margin of 3.33%, and an 11.08% discount rate that reflects the risk around execution and funding. The same framework assumes earnings turn positive, with earnings per share reaching ¥49.42 by around October 2029, and a future P/E of 24.9x that sits above the current 14.1x multiple for the JP Multiline Retail industry.
There is also a fairness debate inside the forecasts themselves. The top end price target sits at ¥1,400 while the lowest is ¥575, so investors following Rakuten Group need to decide which side of that spread feels more realistic given the ongoing FinTech reordering, current net loss of ¥64.4b, and the role of mobile in the broader ecosystem.
Result: Fair Value of ¥895.4 (UNDERVALUED)
Still, the Rakuten Group story can unravel quickly if mobile profitability remains uncertain or if ecosystem engagement weakens and puts extra strain on already loss-making results.
Find out about the key risks to this Rakuten Group narrative.
Next Steps
Rakuten Group’s reshuffle sparks debate, but you do not need to pick a side blindly when the underlying data is sitting in front of you. Take a closer look at the upside signals using the 4 key rewards.
Looking for more investment ideas beyond Rakuten Group?
Do not stop your research with Rakuten Group when a wider watchlist could help you spot opportunities earlier and avoid concentration risk.
This article by Simply Wall St is general in nature. We provide commentary based on historical data
and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your
financial situation. We aim to bring you long-term focused analysis driven by fundamental data.
Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
Simply Wall St has no position in any stocks mentioned.
Valuation is complex, but we’re here to simplify it.
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