Rakuten (OTCMKTS:RKUNY) Shares Gap Down - Time to Sell?

Key Points

• Shares gapped down — RKUNY opened at $5.10 after a $5.36 close and was trading down about 2.7% on very light volume (435 shares).
• Analyst views are mixed — Zacks downgraded the stock to a "strong sell" while MarketBeat's consensus remains "Buy" (two Strong Buy, one Sell).
• Fundamentals show weakness — Rakuten missed quarterly EPS (-$0.08 vs. -$0.04 estimate), has negative margins and ROE, and high leverage (debt-to-equity 4.11) despite a revenue beat.

Rakuten, Inc. (OTCMKTS:RKUNY - Get Free Report) shares gapped down prior to trading on Tuesday . The stock had previously closed at $5.36, but opened at $5.10. Rakuten shares last traded at $5.10, with a volume of 435 shares trading hands.

Wall Street Analysts Forecast Growth

Separately, Zacks Research downgraded shares of Rakuten from a "hold" rating to a "strong sell" rating in a research note on Wednesday, March 4th. Two analysts have rated the stock with a Strong Buy rating and one has given a Sell rating to the company's stock. According to MarketBeat, the company presently has a consensus rating of "Buy".

Rakuten Trading Down 2.7%

The company has a debt-to-equity ratio of 4.11, a current ratio of 1.16 and a quick ratio of 1.16. The stock's 50-day moving average price is $5.11 and its 200 day moving average price is $5.84. The firm has a market capitalization of $11.03 billion, a PE ratio of -9.41 and a beta of 1.20.

Rakuten (OTCMKTS:RKUNY - Get Free Report) last released its quarterly earnings results on Thursday, February 12th. The company reported ($0.08) earnings per share for the quarter, missing analysts' consensus estimates of ($0.04) by ($0.04). Rakuten had a negative net margin of 7.13% and a negative return on equity of 14.73%. The firm had revenue of $4.61 billion during the quarter, compared to the consensus estimate of $4.15 billion. On average, sell-side analysts expect that Rakuten, Inc. will post -0.07 EPS for the current fiscal year.

Rakuten Company Profile

Rakuten, Inc is a diversified internet services company based in Tokyo, Japan, and founded in 1997 by Hiroshi Mikitani, who continues to serve as chairman and chief executive officer. Originally established as an online marketplace, Rakuten has expanded its reach to become a global technology group offering a wide range of digital services and consumer-facing platforms. The company is listed in Japan but its American depositary receipts trade over the counter under the symbol RKUNY.

At the core of Rakuten's business is its e-commerce marketplace, Rakuten Ichiba, which hosts millions of merchants and serves tens of millions of customers across Japan and other key markets.

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