Contrasting Rakuten Group (OTCMKTS:RKUNF) & ContextLogic (NASDAQ:WISH)

Rakuten Group (OTCMKTS:RKUNF) and ContextLogic (NASDAQ:WISH) are both consumer cyclical companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, risk, dividends, profitability, earnings, institutional ownership and valuation.

Valuation and Earnings

This table compares Rakuten Group and ContextLogic”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rakuten Group	N/A	N/A	N/A	$27.96	0.20
ContextLogic	$287.00 million	0.54	-$317.00 million	($11.98)	-0.53

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Rakuten Group	N/A	N/A	N/A
ContextLogic	-131.05%	-115.96%	-62.36%

Analyst Recommendations

This is a summary of recent ratings for Rakuten Group and ContextLogic, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rakuten Group	0	0	0	0	N/A
ContextLogic	0	2	0	0	2.00

Institutional and Insider Ownership

18.9% of Rakuten Group shares are owned by institutional investors. Comparatively, 46.0% of ContextLogic shares are owned by institutional investors. 8.2% of ContextLogic shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

Rakuten Group beats ContextLogic on 5 of the 8 factors compared between the two stocks.

About Rakuten Group

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 ContextLogic

ContextLogic Inc. operates as a mobile ecommerce company in Europe, North America, South America, and internationally. The company operates Wish, an ecommerce platform that connects consumers to merchants. It also provides marketplace and logistics services to merchants. ContextLogic Inc. was incorporated in 2010 and is headquartered in San Francisco, California.