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Rambus (RMBS) Moves 10.8% Higher: Will This Strength Last?

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Rambus (RMBS - Free Report) shares rallied 10.8% in the last trading session to close at $42.47. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 12.7% loss over the past four weeks.

The optimism surrounding the stock can be attributed to the rising adoption of Ramus’ products. The company is rapidly expanding its portfolio with innovative product launches which helps in attracting more customers. Recently, it launched the industry’s first high-bandwidth memory (HBM)-4 Memory Controller Intellectual Property chip. Winning multiple deals from several customers is contributing well to its top line.

This memory chip designer is expected to post quarterly earnings of $0.50 per share in its upcoming report, which represents a year-over-year change of +16.3%. Revenues are expected to be $147 million, up 9.5% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with 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 #1 (Strong Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Rambus is part of the Zacks Electronics - Semiconductors industry. Synaptics (SYNA - Free Report) , another stock in the same industry, closed the last trading session 8.8% higher at $78.66. SYNA has returned -7.3% in the past month.

Synaptics' consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.75. Compared to the company's year-ago EPS, this represents a change of +44.2%. Synaptics currently boasts a Zacks Rank of #3 (Hold).


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