The firm believes the technology solutions company will continue to move away from being known as a "patent roll" and progress toward a business model based on collaborative design and intellectual property for customers.
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TheStreet Ratings team rates RAMBUS INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate RAMBUS INC (RMBS) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company's return on equity has been disappointing."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 5.2%. Since the same quarter one year prior, revenues rose by 27.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Powered by its strong earnings growth of 35.71% and other important driving factors, this stock has surged by 109.09% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- 38.90% is the gross profit margin for RAMBUS INC which we consider to be strong. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of -13.31% is in-line with the industry average.
- RMBS's debt-to-equity ratio of 0.92 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that RMBS's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.83 is high and demonstrates strong liquidity.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, RAMBUS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: RMBS Ratings Report