Rambus (RMBS) AI Stock Analysis

• Market Cap: $7.15B
• Dividend Yield: N/A
• Average Volume (3M): 905.67K
• Price to Earnings (P/E): 34.9
• Beta (1Y): 2.24
• Revenue Growth: 30.13%
• EPS Growth: -42.27%
• Country: US
• Employees: 712
• Sector: Technology
• Sector Strength: 94
• Industry: Semiconductors
• EPS (TTM): 0.67
• Shares Outstanding: 107,411,920
• 10 Day Avg. Volume: 1,000,472
• 30 Day Avg. Volume: 905,669
• PEG Ratio: 2.13
• Price to Book (P/B): 5.96
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 29.68
• Enterprise Value/Market Cap: 0.95
• Enterprise Value/Revenue: 3.17
• Enterprise Value/Gross Profit: 14.27
• Enterprise Value/Ebitda: 6.58
• 1Y Price Target: $73.25
• Price Target Upside: 9.97% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 82 Outperform
• Price Target: $72.00 ▲(8.09%Upside)

Rambus's strong financial performance and positive earnings call are the primary contributors to its solid overall stock score. While technicals indicate strong momentum, the high P/E ratio suggests a potential overvaluation. Investors should consider the company's growth potential against the backdrop of its valuation.

Positive Factors

Financial Performance

Rambus shares have significantly outperformed, trading 35% higher compared to a 7% decline in the SOXX index over the same timeframe.

Market Share

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 Expansion

MR-DIMMs are seen as a positive sentiment driver for Rambus looking into the future with a significant content increase opportunity.

Negative Factors

Contract Revenue

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

Revenue Guidance

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 strong financial health with impressive revenue and profit growth, a stable balance sheet with low leverage, and robust cash flow generation, indicating a well-managed company with potential for sustained growth.

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	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
EBITDA	239.27M	241.09M	41.17M	76.43M	21.99M
Net Income	179.82M	333.90M	-14.31M	18.33M	-43.61M
Balance Sheet
Total Assets	1.34B	1.26B	1.01B	1.23B	1.24B
Cash, Cash Equivalents and Short-Term Investments	481.80M	425.84M	313.23M	485.61M	502.65M
Total Debt	30.15M	30.71M	44.48M	198.78M	195.06M
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

• Technical Analysis Sentiment: Positive
• Last Price: 66.61
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 66.61 is above the 20-day moving average (MA) of 64.93, above the 50-day MA of 60.08, and above the 200-day MA of 55.26, indicating a bullish trend. The MACD of 2.20 indicates Negative momentum. The RSI at 60.54 is Neutral, neither overbought nor oversold. The STOCH value of 77.92 is Neutral, 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	$7.15B	34.88	19.26%	―	30.13%	-42.27%
NVMI	82 Outperform	$8.07B	41.69	23.87%	―	41.03%	51.42%
QRVO	74 Outperform	$8.22B	149.52	1.60%	―	-1.34%	―
LSCC	73 Outperform	$7.29B	140.38	7.39%	―	-29.54%	-76.42%
ONTO	71 Outperform	$4.74B	22.57	11.83%	―	21.23%	56.90%
SLAB	64 Neutral	$4.64B	―	-14.77%	―	2.16%	-55.38%
Sector *	63 Neutral	$34.27B	4.89	-11.70%	1.94%	5.41%	-20.02%