Rakuten Group, Inc. (TSE:4755) Just Released Its First-Quarter Results And Analysts Are Updating Their Estimates

It's been a mediocre week for Rakuten Group, Inc. (TSE:4755) shareholders, with the stock dropping 12% to JP¥785 in the week since its latest quarterly results. Revenues were in line with expectations, at JP¥563b, while statutory losses ballooned to JP¥34.08 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Rakuten Group after the latest results.

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Taking into account the latest results, the consensus forecast from Rakuten Group's 14 analysts is for revenues of JP¥2.49t in 2025. This reflects a reasonable 7.0% improvement in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 80% to JP¥18.25. Before this earnings announcement, the analysts had been modelling revenues of JP¥2.48t and losses of JP¥24.19 per share in 2025. Although the revenue estimates have not really changed Rakuten Group'sfuture looks a little different to the past, with a considerable decrease in the loss per share forecasts in particular.

View our latest analysis for Rakuten Group

There's been no major changes to the consensus price target of JP¥1,002, suggesting that reduced loss estimates are not enough to have a long-term positive impact on the stock's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Rakuten Group, with the most bullish analyst valuing it at JP¥1,200 and the most bearish at JP¥510 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Rakuten Group's past performance and to peers in the same industry. The period to the end of 2025 brings more of the same, according to the analysts, with revenue forecast to display 9.4% growth on an annualised basis. That is in line with its 11% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 5.5% annually. So although Rakuten Group is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Rakuten Group going out to 2027, and you can see them free on our platform here.

It might also be worth considering whether Rakuten Group's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

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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.