NEW YORK (TheStreet) -- Shares of Rambus (RMBS) - Get Report were rising 5.17% to $12.61 on heavy trading volume late Tuesday morning after the company reported better-than-anticipated results for the 2016 third quarter.
After yesterday's closing bell, the Sunnyvale, CA-based maker of semiconductor and IP products posted adjusted earnings of 16 cents per diluted share, above analysts' estimates of 13 cents per share.
Revenue spiked 22% to $89.9 million from last year and was higher than Wall Street's expectations of $86.6 million. The increase was due to higher revenue from sales of memory products and security technology development projects.
For the fourth quarter, Rambus sees earnings per diluted share in the range of 14 cents to 18 cents on revenue of $94 million to $98 million. Wall Street is projecting earnings of 15 cents per share on revenue of $94 million for the current quarter.
Jefferies raised its price target to $13.50 from $12.50 and maintained a "hold" rating on the stock following the results.
"RMBS's results and outlook were above consensus, with upside in the quarter coming from royalties, incremental licensing deals and memory buffers," the firm wrote in a note.
"After several acquisitions and a CFO transition, we think RMBS now shifts focus to operational execution. We see potential for strong growth from data center applications with the memory buffer business in 2016, followed by SerDes (Serializer/Deserializer) in 2017," Jefferies added.
More than 1.48 million of the company's shares changed hands so far today vs. its average 30-day volume of 662,773 shares.
Separately, TheStreet Ratings Team has a "Buy" rating with a score of B on the stock.
The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, reasonable valuation levels and good cash flow from operations.
The team believes its strengths outweigh the fact that the company has had sub par growth in net income.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: RMBS