Rambus Inc. Fundamental Analysis (NASDAQ: RMBS)
Rambus Inc. (NASDAQ: RMBS) shows moderate financial fundamentals with a PE ratio of 34.68, profit margin of 33.40%, and ROE of 18.85%. The company generates $0.8B in annual revenue with strong year-over-year growth of 27.13%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 88.1/100 based on profitability, valuation, growth, and balance sheet metrics. The B+ grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze RMBS's fundamental strength across five key dimensions:
Efficiency Score
ExcellentRMBS demonstrates superior asset utilization.
Valuation Score
WeakRMBS trades at a premium to fair value.
Growth Score
ExcellentRMBS delivers strong and consistent growth momentum.
Financial Health Score
ExcellentRMBS maintains a strong and stable balance sheet.
Profitability Score
ExcellentRMBS achieves industry-leading margins.
Key Financial Metrics
Is RMBS Expensive or Cheap?
P/E Ratio
RMBS trades at 34.68 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, RMBS's PEG of 2.24 indicates potential overvaluation.
Price to Book
The market values Rambus Inc. at 6.48 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 25.49 times EBITDA. This signals the market has high growth expectations.
How Well Does RMBS Make Money?
Net Profit Margin
For every $100 in sales, Rambus Inc. keeps $33.40 as profit after all expenses.
Operating Margin
Core operations generate 36.30 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $18.85 in profit for every $100 of shareholder equity.
ROA
Rambus Inc. generates $17.06 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Rambus Inc. generates strong operating cash flow of $344.99M, reflecting robust business health.
Free Cash Flow
Rambus Inc. generates strong free cash flow of $311.34M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $2.91 in free cash annually.
FCF Yield
RMBS converts 3.42% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
34.68
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
2.24
vs 25 benchmark
P/B Ratio
Price to book value ratio
6.48
vs 25 benchmark
P/S Ratio
Price to sales ratio
11.48
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.01
vs 25 benchmark
Current Ratio
Current assets to current liabilities
9.38
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.19
vs 25 benchmark
ROA
Return on assets percentage
0.17
vs 25 benchmark
ROCE
Return on capital employed
0.20
vs 25 benchmark
How RMBS Stacks Against Its Sector Peers
| Metric | RMBS Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 34.68 | 32.70 | Neutral |
| ROE | 18.85% | 758.00% | Weak |
| Net Margin | 33.40% | -4312.00% (disorted) | Strong |
| Debt/Equity | 0.01 | 0.96 | Strong (Low Leverage) |
| Current Ratio | 9.38 | 12.15 | Strong Liquidity |
| ROA | 17.06% | 1067467.00% | Weak |
RMBS outperforms its industry in 3 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Rambus Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
201.98%
Industry Style: Growth, Innovation, High Beta
High GrowthEPS CAGR
698.56%
Industry Style: Growth, Innovation, High Beta
High GrowthFCF CAGR
104.05%
Industry Style: Growth, Innovation, High Beta
High Growth