Rakuten Group Inc
Morningstar Rating for Stocks | Fair Value | Economic Moat | Capital Allocation |
---|---|---|---|
¥727.00 | Ltgl | Vjgd |
Low Subscription Growth and High Network Costs Expected in 2023; Rakuten FVE Lowered to JPY 840
Rakuten reported the highest annual operating loss in its history, a whopping JPY 364 billion, mainly due to its unprofitable mobile business, following heavy investment, roaming costs, and slower-than-expected user acquisition. On the earnings call, management stated that operating expenses will decline significantly once the company completes the rollout of its nationwide telecom network, and mentioned that the company does not intend to increase gross debt in the future. We believe this allayed the market’s concerns somewhat as Rakuten’s share price jumped more than 7% in the next day.