KE (NYSE:BEKE) and Rakuten (OTCMKTS:RKUNY) Financial Analysis

Rakuten (OTCMKTS:RKUNY) and KE (NYSE:BEKE) are both large-cap computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, risk, profitability, earnings, institutional ownership, valuation and dividends.

Profitability

This table compares Rakuten and KE’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Rakuten	-6.67%	-13.96%	-0.62%
KE	3.37%	5.47%	2.99%

Volatility & Risk

Rakuten has a beta of 1.2, meaning that its stock price is 20% more volatile than the S&P 500. Comparatively, KE has a beta of -0.64, meaning that its stock price is 164% less volatile than the S&P 500.

Insider and Institutional Ownership

39.3% of KE shares are held by institutional investors. 6.8% of KE shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Rakuten and KE”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rakuten	$15.07 billion	0.85	-$1.07 billion	($0.50)	-11.84
KE	$103.52 billion	0.21	$556.89 million	$0.42	43.82

KE has higher revenue and earnings than Rakuten. Rakuten is trading at a lower price-to-earnings ratio than KE, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Rakuten and KE, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rakuten	0	0	0	2	4.00
KE	0	3	5	0	2.63

KE has a consensus price target of $22.69, suggesting a potential upside of 23.26%. Given KE’s higher probable upside, analysts plainly believe KE is more favorable than Rakuten.

Summary

KE beats Rakuten on 11 of the 15 factors compared between the two stocks.

About Rakuten

Rakuten Group, Inc. provides services in e-commerce, fintech, digital content, and communications to various users in Japan and internationally. The company operates through three segments: Internet Services, FinTech, and Mobile. The Internet Services segment provides range of e-commerce sites, such as Rakuten Ichiba, an Internet shopping mall, online cash-back sites, travel booking sites, portal sites, and digital content sites. It also offers messaging services and sells advertising; and manages professional sport teams. The FinTech segment offers financial services over the internet related to banking and securities, credit cards, life insurance, general insurance, electronic payment business, crypto asset (virtual currency) spot transaction, etc. The Mobile segment provides communication services and technology, electricity supply, and digital content site services. The company was formerly known as Rakuten, Inc. and changed its name to Rakuten Group, Inc. in April 2021. Rakuten Group, Inc. was incorporated in 1997 and is headquartered in Setagaya, Japan.

About KE

KE Holdings Inc., through its subsidiaries, engages in operating an integrated online and offline platform for housing transactions and services in the People's Republic of China. It operates through four segments: Existing Home Transaction Services, New Home Transaction Services, Home Renovation and Furnishing, and Emerging and Other Services. The company operates Beike, an integrated online and offline platform for housing transactions and services; Lianjia, a real estate brokerage branded store; Agent Cooperation Network, an operating system that fosters reciprocity and bonding among various service providers; and software-as-a-service systems. It also owns the Deyou brand for connected brokerage stores; and other brands. In addition, the company offers contract, secure payment, escrow, and other services. KE Holdings Inc. was founded in 2001 and is headquartered in Beijing, the People's Republic of China.