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Bear of the Day: Rambus (RMBS)

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With the market caving through some serious support levels, it can feel like everything you touch turns to garbage. It’s the opposite of the Golden Touch of King Midas. Don’t feel alone if you’re out there watching your recent stock picks turn to stone. I am not here to tell you to be a fair-weather fan for your stock. Rather, now is a time to decide whether or not your stocks deserve your patience.

Patience pays when you are adding to a stock that has great earnings that keep moving in a positive direction. When earnings are moving the wrong way, you better have a good reason to stick with the script. Today’s Bear of the Day is a stock that has seen earnings move in the wrong direction.

Today’s Bear of the Day is Rambus ((RMBS - Free Report) ). 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 and DDR4 memory interface chips to module manufacturers, and OEMs; silicon IP comprising, interface and security IP solutions that move and protect data in advanced data center, government, and automotive applications; and physical interface and digital controller IP to offer industry-leading, integrated memory, and interconnect subsystems.

The reason for the unfavorable rank is that analysts have been moving their earnings estimates to the downside. Over the last sixty days, analysts have cut their numbers for the current year and next year. The Zacks Consensus Estimate came down from $1.79 to $1.76 for the current year while next year’s number is off from $2.26 to $2.16.

Zacks Investment Research
Image Source: Zacks Investment Research

That’s not that bad in the grand scheme of things. This is a stock that has seen estimates rise consistently over the last three years. The problem has been the last six months. Earnings estimates appear to have topped out a bit. That is a departure from his stocks’ previous behavior of under promising and over-delivering.

The Electronics – Semiconductor industry is in the Bottom 22% of our Zacks Industry Rank. However, there are a few stocks within the industry which are in the good graces of our Zacks Rank. Those include Zacks Rank #2 (Buy) Applied Optoelectronics ((AAOI - Free Report) ) and Navitas Semiconductor ((NVTS - Free Report) ).


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Rambus, Inc. (RMBS) - free report >>

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