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Rambus Inc (RMBS)
NASDAQ:RMBS
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Rambus
(NASDAQ:RMBS)
78Outperform
Positive Factors
AI and Data Center Growth
Rambus has over 75% revenue exposure to data centers with AI rapidly becoming a major component of growth.
Market Share Growth
Rambus is expected to increase its market share in the Registered Clock Driver chip market to over 40% from 20%, and enter the RDIMM companion chip market targeting a 20% share.
Product Cycle and Cash Flow
Rambus is seen as a unique stock within the semiconductor industry, offering a strong product cycle and high free cash flow from consistent intellectual property business.
Negative Factors
Financial Guidance
The guidance for 1Q25 indicates a 4% quarter-over-quarter decline, driven by lower Licensing Billings revenue.
Revenue Dependency
Rambus derives a significant portion of its revenue from memory licensing fees, secured by long-term agreements with top memory vendors, offering predictable free cash flow through the semiconductor cycle.
Rambus (RMBS) vs. S&P 500 (SPY)
Market Cap
$5.81B
Dividend YieldN/A
Average Volume (3M)943.01K
Price to Earnings (P/E)34.4
Beta (1Y)2.37
Revenue Growth20.71%
EPS Growth-45.51%
CountryUS
Employees712
SectorTechnology
Sector Strength47
IndustrySemiconductors and Equipment
Share Statistics
EPS (TTM)1.65
Shares Outstanding106,856,350
10 Day Avg. Volume832,417
30 Day Avg. Volume943,013
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)10.93
Price to Cash Flow (P/CF)25.80
P/FCF Ratio29.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$71.00Price Target Upside25.18% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
Rambus Business Overview & Revenue Model
Company DescriptionRambus Inc. is a technology company that specializes in the design, development, and licensing of semiconductor and IP products. Founded in 1990 and headquartered in Sunnyvale, California, Rambus operates primarily in the semiconductor industry, offering solutions that enhance the performance and efficiency of memory and interface technologies. The company provides a range of products and services, including memory interface chips, security IP cores, and high-speed interface solutions for data centers and consumer electronics.
How the Company Makes MoneyRambus makes money primarily through the sale of semiconductor products and the licensing of its intellectual property (IP). Its revenue streams are centered around two main areas: product sales and licensing fees. The company manufactures and sells memory interface chips that are used in a variety of applications, including data centers and consumer electronics. Additionally, Rambus licenses its technology and patents to other semiconductor companies, generating revenue through royalties and licensing agreements. Key partnerships with leading technology firms and continuous innovation in high-speed data transfer and security solutions further contribute to the company’s earnings.
Rambus Financial Statement Overview
Summary
Rambus demonstrates strong financial health with robust revenue growth, high profitability margins, and solid cash flow generation. The company benefits from low leverage and a strong equity position, though there is room for improvement in ROE.Income Statement
Rambus has demonstrated strong revenue growth, with a 20.7% increase from 2023 to 2024. The company exhibits a robust gross profit margin of 80.2% and a net profit margin of 32.3% for 2024. The EBIT margin is also commendable at 32.9%. Notably, the net income has improved significantly compared to prior years, indicating enhanced profitability.85
Very Positive
Balance Sheet
The balance sheet reflects a solid equity position, with a debt-to-equity ratio of 0.03, indicating low leverage. The equity ratio stands at 83.5%, showcasing a strong financial foundation. However, the return on equity (ROE) of 16.0% suggests room for improvement in generating returns from equity.79
Positive
Cash Flow
Rambus exhibits a healthy cash flow position, with a 15.9% growth in free cash flow from 2023 to 2024. The operating cash flow to net income ratio is 1.28, indicating strong cash generation relative to profits. The free cash flow to net income ratio is 1.11, highlighting effective cash management and reinvestment capacity.88
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 556.62M | 461.12M | 454.79M | 328.30M | 242.75M | Gross Profit |
| 446.52M | 357.69M | 347.21M | 257.91M | 182.00M | EBIT |
| 183.01M | 153.64M | 76.94M | 39.66M | -44.52M | EBITDA |
| 244.15M | 241.09M | 41.17M | 76.43M | 21.99M | Net Income Common Stockholders |
| 179.82M | 333.90M | -14.31M | 18.33M | -43.61M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 481.80M | 425.84M | 313.23M | 485.61M | 502.65M | Total Assets |
| 1.34B | 1.26B | 1.01B | 1.23B | 1.24B | Total Debt |
| 30.15M | 30.71M | 44.48M | 198.78M | 195.06M | Net Debt |
| -69.62M | -64.06M | -80.85M | 90.89M | 58.91M | Total Liabilities |
| 222.44M | 220.13M | 233.30M | 370.25M | 338.76M | Stockholders Equity |
| 1.12B | 1.04B | 779.30M | 862.40M | 905.11M |
| Cash Flow | Free Cash Flow | |||
| 199.90M | 172.55M | 209.91M | 195.43M | 155.73M | Operating Cash Flow |
| 230.60M | 195.79M | 230.39M | 209.22M | 185.46M | Investing Cash Flow |
| -56.72M | -57.40M | 151.98M | -115.66M | -90.39M | Financing Cash Flow |
| -167.99M | -169.62M | -362.94M | -114.21M | -61.19M |
Rambus Technical Analysis
Positive
56.72
Price Trends
59.32
Negative
56.82
Positive
52.80
Positive
Market Momentum
-1.39
Negative
50.74
Neutral
86.56
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RMBS, the sentiment is Positive. The current price of 56.72 is above the 20-day moving average (MA) of 55.07, below the 50-day MA of 59.32, and above the 200-day MA of 52.80, indicating a neutral trend. The MACD of -1.39 indicates Negative momentum. The RSI at 50.74 is Neutral, neither overbought nor oversold. The STOCH value of 86.56 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RMBS.
Rambus Risk Analysis
Rambus disclosed 46 risk factors in its most recent earnings report. Rambus reported the most risks in the “Tech & Innovation” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Rambus Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $5.81B | 34.44 | 16.66% | ― | 20.71% | -45.51% | |
73 Outperform | $167.74B | 105.89 | 2.89% | ― | 13.69% | 91.75% | |
68 Neutral | $29.15B | 95.57 | 4.71% | 3.35% | -44.31% | -86.74% | |
67 Neutral | $18.30B | 11.99 | 18.97% | ― | -14.19% | -27.42% | |
65 Neutral | $163.28B | 34.54 | 28.25% | 2.96% | -10.72% | -26.60% | |
58 Neutral | $21.91B | 10.52 | -19.51% | 2.38% | 4.81% | -25.47% | |
54 Neutral | $112.23B | ― | -18.31% | 2.09% | -2.08% | -1212.72% |
* Technology Sector Average
Performance Comparison
RMBS
Rambus
56.72
-6.64
-10.48%
AMD
Advanced Micro Devices
106.44
-73.21
-40.75%
INTC
Intel
24.26
-17.87
-42.42%
MCHP
Microchip
51.72
-34.19
-39.80%
ON
ON Semiconductor
43.78
-30.90
-41.38%
TXN
Texas Instruments
179.00
11.22
6.69%
Rambus Earnings Call Summary
Earnings Call Date: Feb 3, 2025 | % Change Since: -6.01% | Next Earnings Date: May 5, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong performance for Rambus in 2024 with record revenues and significant strategic achievements, such as the patent extension with Micron and introduction of new products. The company has shown resilience and growth potential in the data center and AI markets. However, there are some concerns regarding dependency on future platform rollouts and low demand for older technology products.Highlights
Record Product Revenue
Rambus delivered a record annual product revenue of $247 million, driven by strong performance in memory interface chips.
Strategic Patent Extension
Extended patent licensing agreement with Micron through 2029, strengthening long-term licensing foundation.
Cash Generation and Stock Repurchase
Generated $231 million in cash from operations, a new annual high, and repurchased $113 million of stock, retiring approximately 2.2 million shares.
Introduction of New Products
Introduced eight new chips in 2024, including DDR5 server PMIC and the industry's first complete chipset for DDR5 MRDIMMs.
Q4 Performance
Q4 revenue of $161.1 million exceeded the high end of expectations, with memory interface chips revenue up 11% sequentially and 37% year-over-year.
Lowlights
Challenges with DDR4 Demand
Continued low demand for DDR4 products despite declining inventory levels.
Dependency on Intel Platform
Future revenue growth significantly tied to the rollout and adoption of Intel's next-generation platform.
Company Guidance
During the Rambus Fourth Quarter and Fiscal Year 2024 Earnings Conference Call, the company provided robust guidance, highlighting several key metrics that underscore its strong financial and operational performance. Rambus achieved record annual product revenue of $247 million, driven by a 37% year-over-year increase in Q4 revenue from memory interface chips, totaling $73 million. The company also reported a new annual high for cash from operations at $231 million. Looking ahead to 2025, Rambus expects Q1 revenue to range between $156 million and $162 million, with royalty revenue projected between $56 million and $62 million and licensing billings between $59 million and $65 million. The company anticipates Q1 non-GAAP earnings per share between $0.51 and $0.59. Continued market share gains, particularly in DDR5 products, and the introduction of eight new chip products in 2024 are expected to drive further growth, with significant contributions from companion chips projected in the latter half of 2025.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.