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Why Rambus (RMBS) Outpaced the Stock Market Today

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The latest trading session saw Rambus (RMBS - Free Report) ending at $69.65, denoting a +0.43% adjustment from its last day's close. The stock exceeded the S&P 500, which registered a gain of 0.17% for the day. Elsewhere, the Dow saw a downswing of 0.05%, while the tech-heavy Nasdaq appreciated by 0.2%.

Shares of the memory chip designer witnessed a gain of 2.73% over the previous month, trailing the performance of the Computer and Technology sector with its gain of 4.37% and the S&P 500's gain of 4.71%.

The upcoming earnings release of Rambus will be of great interest to investors. The company's earnings per share (EPS) are projected to be $0.45, reflecting a 4.26% decrease from the same quarter last year. Alongside, our most recent consensus estimate is anticipating revenue of $134.01 million, indicating a 13.71% downward movement from the same quarter last year.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $1.76 per share and a revenue of $556.63 million, signifying shifts of +0.57% and -2.64%, respectively, from the last year.

Investors might also notice recent changes to analyst estimates for Rambus. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. Rambus currently has a Zacks Rank of #3 (Hold).

In the context of valuation, Rambus is at present trading with a Forward P/E ratio of 39.52. This signifies a premium in comparison to the average Forward P/E of 28.5 for its industry.

It is also worth noting that RMBS currently has a PEG ratio of 2.81. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Electronics - Semiconductors industry had an average PEG ratio of 4.13 as trading concluded yesterday.

The Electronics - Semiconductors industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 194, finds itself in the bottom 24% echelons of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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