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Rambus (RMBS) Soars 5.4%: Is Further Upside Left in the Stock?

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Rambus (RMBS - Free Report) shares soared 5.4% in the last trading session to close at $31.23. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 8.5% gain over the past four weeks.

Rambus’ stock appreciated on continued optimism surrounding the demand for its products and solutions. The company is benefiting from increased chip demand from PC manufacturers and data-center operators due to the current work-from-home and learn-from-home trends amid the COVID-19 pandemic.

This memory chip designer is expected to post quarterly earnings of $0.37 per share in its upcoming report, which represents a year-over-year change of +23.3%. Revenues are expected to be $127.95 million, up 21.9% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Rambus, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on RMBS going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Rambus is a member of the Zacks Electronics - Semiconductors industry. One other stock in the same industry, Cirrus Logic (CRUS - Free Report) , finished the last trading session 2% higher at $83.77. CRUS has returned -2.7% over the past month.

Cirrus Logic's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $1.41. Compared to the company's year-ago EPS, this represents a change of +113.6%. Cirrus Logic currently boasts a Zacks Rank of #1 (Strong Buy).


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