Rakuten Group (TSE:4755) EPS Loss Narrows In Q1 2026 Challenging Profitability Skeptics

Rakuten Group (TSE:4755) has kicked off Q1 2026 with revenue of ¥643.6b and a basic EPS loss of ¥8.59, while on a trailing twelve month basis revenue stands at ¥2.6t and basic EPS is a loss of ¥56.79. Over recent quarters, the company has seen revenue move from ¥562.7b in Q1 2025 to ¥708.9b in Q4 2025 and then to ¥643.6b in Q1 2026, alongside quarterly basic EPS losses shifting from ¥34.08 to ¥12.26 and then to ¥8.59 as investors continue to watch how this earnings profile evolves. With the stock trading at ¥765.4 and the business still working through losses, a central focus for investors is how margins can rebuild from here. See our full analysis for Rakuten Group.With the latest numbers on the table, the next step is to see how this earnings profile lines up against the widely followed narratives around Rakuten Group's path to profitable growth and valuation. See what the community is saying about Rakuten Group TSE:4755 Revenue & Expenses Breakdown as at May 2026 Trailing Losses Still Heavy At ¥123.1b On a trailing twelve month basis, Rakuten Group reported revenue of ¥2.6t and a net loss of ¥123.1b, with basic EPS at a loss of ¥56.79. Consensus narrative expects revenue to grow 7.6% per year and margins to move from a loss of 7.1% to a profit margin of 3.4% in three years, which contrasts with the current loss making profile. Forecast earnings of ¥104.8b and EPS of ¥48.37 by around 2029 sit against today’s trailing loss of ¥123.1b, so the story depends on a sizeable swing in profitability. Analysts look for a PE of 28.4x on those future earnings, while today’s loss means the stock at ¥765.4 is not trading on a conventional positive P/E yet. Quarterly Losses Narrow From ¥73.5b To ¥18.6b Across the last five reported quarters, quarterly net losses moved from ¥73.5b in Q1 2025 to ¥50.9b, ¥26.9b, ¥26.6b, and then ¥18.6b in Q1 2026, with basic EPS losses moving in tandem from ¥34.08 to ¥8.59 over the same span. Bulls argue that ecosystem growth, AI driven efficiencies and fintech contributions can sustain this kind of margin improvement, yet the trailing twelve month loss of ¥123.1b shows that the turnaround is still incomplete. Forecast earnings growth of about 61.97% per year and an expected shift to profitability within three years are far more optimistic than what the recent loss making history alone would suggest. Bullish expectations for margins to move from a loss of 8.8% to a profit margin of 4.4% rely on segments like mobile and e commerce turning into profit contributors instead of dragging on group results. On that view, if you want to see how supporters of the optimistic case connect these margin trends to long term earnings, check out the 🐂 Rakuten Group Bull Case. Cheap On P/S, But Bears Flag Profit Risk The stock trades around ¥765.4, with a P/S of 0.6x versus a peer average of 2.1x and well below a DCF fair value of ¥5,175.65, while the company is still loss making over the past five years with losses growing about 0.5% a year. Bears highlight that revenue growth of 5.5% per year trails a 5.9% reference rate for the JP market and that persistent losses mean the low P/S and gap to DCF fair value could reflect execution risk rather than a clear bargain. Bearish scenarios assume revenue growth of 4.8% per year and profit margins improving only from a loss of 7.1% to a profit margin of 2.2%, which is a more cautious path than the consensus view. Under that cautious setup, earnings of ¥63.1b by 2029 would still require a P/E of 33.1x, higher than the stated JP Multiline Retail industry P/E of 17.0x, so bears question whether the current discount fully compensates for that reliance on future re rating. Skeptical readers who want to see how cautious analysts frame these risks around growth, margins and valuation can read the full bear case through the 🐻 Rakuten Group Bear Case. Next Steps To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Rakuten Group on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves. If the mix of optimism and caution in this article feels familiar, that is exactly why it helps to test the numbers yourself and not rely on any single narrative. To see what is driving the more optimistic view on the stock, take a closer look at the 2 key rewards. See What Else Is Out There Rakuten Group is still working through sizeable losses and relies heavily on ambitious forecasts for margins and earnings to reach the profitability many investors are hoping for. If that reliance on future margin improvement feels uncomfortable, you can balance your watchlist by checking out companies already showing resilient earnings profiles through the 56 resilient stocks with low risk scores. 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. 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