Rambus (RMBS) AI Stock Analysis

• Market Cap: $6.87B
• Dividend Yield: N/A
• Average Volume (3M): 843.01K
• Price to Earnings (P/E): 33.5
• Beta (1Y): 2.25
• Revenue Growth: 30.13%
• EPS Growth: -42.27%
• Country: US
• Employees: 712
• Sector: Technology
• Sector Strength: 86
• Industry: Semiconductors
• EPS (TTM): 0.67
• Shares Outstanding: 107,411,920
• 10 Day Avg. Volume: 914,211
• 30 Day Avg. Volume: 843,010
• PEG Ratio: 1.96
• Price to Book (P/B): 5.49
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 27.33
• Enterprise Value/Market Cap: 0.91
• Enterprise Value/Revenue: 2.91
• Enterprise Value/Gross Profit: 13.12
• Enterprise Value/Ebitda: 6.05
• 1Y Price Target: $70.75
• Price Target Upside: 10.51% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 82 Outperform
• Price Target: $72.00 ▲(12.46%Upside)

Rambus's strong financial performance and positive earnings call sentiment are the primary drivers of the overall score. Technical analysis supports a positive momentum outlook, while the valuation reflects market optimism but also signals a premium price. The absence of corporate events and the focus on reinvestment further context the overall position.

Positive Factors

Market Share Expansion

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

Contract Revenue Performance

Contract Revenue came in lower due to selling lower customizable IP.

Licensing Revenue Decline

The guidance for 1Q25 indicates a 4% quarter-over-quarter decline, driven by lower Licensing Billings revenue.

Rambus Business Overview & Revenue Model

Company Description

Rambus Inc. provides semiconductor products in the United States, Taiwan, South Korea, Japan, Europe, Canada, Singapore, China, and internationally. The company offers DDR memory interface chips, including DDR5, DDR4 and DDR3 memory interface chips to module manufacturers and OEMs; silicon IP comprising, interface and security IP solutions that move and protect data in advanced applications; and physical interface and digital controller IP to offer industry-leading, integrated memory and interconnect subsystems. It also provides a portfolio of patents that covers memory architecture, high-speed serial links, and security products. The company markets its products and services through its direct sales force and distributors. Rambus Inc. was incorporated in 1990 and is headquartered in San Jose, California.

How the Company Makes Money

Rambus generates revenue primarily through the licensing of its patented technologies and intellectual property to semiconductor companies and electronics manufacturers. The company earns money by charging licensing fees and royalties for the use of its technology in various products. In addition to licensing, Rambus sells semiconductor products, such as memory interface chips and security products, which contribute to its revenue streams. The company also engages in strategic partnerships and collaborations to expand its market reach and enhance its technological offerings, further bolstering its income through joint ventures and shared innovations.

Rambus Financial Statement Overview

Summary

Rambus exhibits robust financial health with strong revenue and profit growth, a stable balance sheet with low leverage, and solid cash flow generation. These factors signify a well-managed company poised for sustained growth and profitability.

Income Statement

Rambus has demonstrated strong revenue growth with a notable 32.8% increase from 2023 to 2024. The gross profit margin is robust at 79.0% for TTM, reflecting efficient cost management. Additionally, the net profit margin improved significantly to 34.2%, indicating enhanced profitability. The EBIT and EBITDA margins are solid at 35.7% and 42.5% respectively, showcasing operational efficiency and a strong earnings base.

Balance Sheet

The balance sheet of Rambus is healthy, with a debt-to-equity ratio of 0.03, indicating low leverage and financial stability. The return on equity has improved to 17.9%, demonstrating effective use of equity capital to generate profits. The equity ratio is strong at 84.1%, suggesting a solid capital structure with significant shareholder equity relative to total assets.

Cash Flow

Rambus has shown positive cash flow trends, with a 16.7% growth in free cash flow from 2023 to 2024, indicating strong cash generation capabilities. The operating cash flow to net income ratio is 1.30, reflecting a healthy cash conversion cycle and efficient operations. The free cash flow to net income ratio is also robust at 1.13, indicating that the company effectively converts its net earnings into cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	605.42M	556.62M	461.12M	454.79M	328.30M	242.75M
Gross Profit	478.42M	446.52M	357.69M	347.21M	257.91M	182.00M
EBITDA	271.76M	239.27M	241.09M	41.17M	76.43M	21.99M
Net Income	207.23M	179.82M	333.90M	-14.31M	18.33M	-43.61M
Balance Sheet
Total Assets	1.38B	1.34B	1.26B	1.01B	1.23B	1.24B
Cash, Cash Equivalents and Short-Term Investments	514.39M	481.80M	425.84M	313.23M	485.61M	502.65M
Total Debt	29.19M	30.15M	30.71M	44.48M	198.78M	195.06M
Total Liabilities	219.53M	222.44M	220.13M	233.30M	370.25M	338.76M
Stockholders Equity	1.16B	1.12B	1.04B	779.30M	862.40M	905.11M
Cash Flow
Free Cash Flow	233.33M	199.90M	172.55M	209.91M	195.43M	155.73M
Operating Cash Flow	268.89M	230.60M	195.79M	230.39M	209.22M	185.46M
Investing Cash Flow	-136.46M	-56.72M	-57.40M	151.98M	-115.66M	-90.39M
Financing Cash Flow	-112.40M	-167.99M	-169.62M	-362.94M	-114.21M	-61.19M

Rambus Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 64.02
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: 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 64.02 is above the 20-day moving average (MA) of 59.79, above the 50-day MA of 55.08, and above the 200-day MA of 53.34, indicating a bullish trend. The MACD of 2.24 indicates Negative momentum. The RSI at 68.24 is Neutral, neither overbought nor oversold. The STOCH value of 91.89 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RMBS.

Rambus Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RMBS	82 Outperform	$6.87B	33.51	19.26%	―	30.13%	-42.27%
NVMI	79 Outperform	$7.87B	40.63	23.87%	―	41.03%	51.42%
ONTO	74 Outperform	$4.83B	22.40	11.83%	―	21.23%	56.90%
LSCC	73 Outperform	$6.90B	135.10	7.39%	―	-29.54%	-76.42%
QRVO	72 Outperform	$7.79B	142.58	1.60%	―	-1.34%	―
SLAB	64 Neutral	$4.82B	―	-14.77%	―	2.16%	-55.38%
Sector *	63 Neutral	$33.22B	5.99	-11.76%	1.91%	5.50%	-19.96%