One-glance verdict
Within fair range
$70.20 our estimate vs market $81.41
Wall Street consensus: $147.86 (110.6% higher than our fair-value estimate)
16% above our estimate
Fundamentals snapshot
Rambus Inc.
RMBS · NMS · Technology · Semiconductors
Current price
$81.41
52-week range
$77.89 - $174.10
Market cap
$8.83B
Balance sheet
Healthy
189.53x Strong cushion
Net cash $803.14M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Returns 17.8% on equity, ahead of 40% of its peers.
- Reward Free cash flow was positive in 10/10 years.
- Risk Stock trades 16.7% above its 5-year average P/E.
- Risk Insider ownership is only 0.8% (peer median: 1.8%).
What this company does
Rambus Inc.
Rambus designs and sells essential chips and digital blueprints that help computer memory and data centers operate faster and more securely. The company makes money both by selling these physical chips and by licensing its patented designs to other tech companies, which provides a steady, predictable income. This is important because as technology like AI and cloud computing grows, the need for Rambus's high-performance data-handling technology becomes even greater.
How the company got here
Founded in 1990 by two engineers, Rambus started by inventing much faster ways for computer chips to talk to each other, especially between the main processor and the memory. For a long time, its main business was licensing these inventions, essentially charging other tech companies a fee to use its patented designs in their own products. This led to a history marked by significant patent-related lawsuits. Over the years, through internal development and buying other companies, Rambus has shifted its focus from just licensing ideas to also designing and selling its own specialized chips.
What it actually does
Think of Rambus as a company that designs the super-highways for data inside computers and other electronic devices. Just like a city needs well-designed roads for traffic to flow smoothly, modern electronics need incredibly fast and reliable pathways for information to move between the 'brain' (the processor) and the 'short-term memory' (the RAM). Rambus creates the blueprints for these data highways and also sells specialized chips that act as traffic controllers, ensuring data moves quickly and safely. Their technology is crucial for high-performance systems like the powerful computers in data centers and those used for artificial intelligence (AI).
Memory Interface Chips
This is the company's biggest business line, where it sells physical chips to companies that build memory modules for powerful computers like servers. These chips, such as Registering Clock Drivers (RCDs), act like traffic cops on a memory stick, managing the flow of data to make sure it's stable and fast. As data centers and AI require processing huge amounts of information, the demand for these high-speed memory components has grown significantly. This segment has become the largest part of Rambus's revenue, shifting it from a company that primarily licensed ideas to one that also sells its own hardware.
Silicon IP
In this part of the business, Rambus sells its designs and blueprints, known as Silicon Intellectual Property (IP), to other chipmakers. Instead of buying a physical chip from Rambus, a customer can license (buy the rights to use) a pre-designed block of technology, like a high-speed connection or a security feature. They then integrate this IP into their own chip designs, which saves them time and money from having to invent it themselves. This includes designs for moving data between chips (interface IP) and for protecting data from being stolen or altered (security IP).
Licensing
This is the original foundation of Rambus's business, where it earns money from its large portfolio of patents. Companies that make memory, processors, and other electronic components pay Rambus royalties (a fee, often a percentage of sales) to use its patented technologies in their products. These licensing agreements are often long-term and provide a stable and predictable stream of income for the company. This part of the business is very profitable because there are very few costs associated with it once the patents are established.
What management is betting on now
Rambus is heavily focused on the growing demands of data centers and artificial intelligence (AI). Management believes that as AI models become more complex, the need for faster and more efficient ways to move data between memory and processors will explode. The company is investing heavily in developing the next generation of memory interface chips (like those for DDR5 and future DDR6 memory) and high-speed connection technologies like CXL. By acquiring smaller companies with specialized expertise, Rambus is also strengthening its ability to provide the critical components needed to prevent data bottlenecks in the powerful computer systems that run AI applications.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q2
$59.09M
FY2024 Q3
$52.20M
FY2024 Q4
$52.49M
FY2025 Q1
$69.54M
FY2025 Q2
$87.85M
FY2025 Q3
$82.48M
FY2025 Q4
$93.30M
FY2026 Q1
$71.57M
Revenue
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Net income
$59.86M
Diluted EPS
0.55
Operating cash flow
$83.21M
Free cash flow
$71.57M
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Sources
Revenue
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Net income
$63.84M
Diluted EPS
0.58
Operating cash flow
$99.82M
Free cash flow
$93.30M
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Sources
Revenue
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Net income
$48.38M
Diluted EPS
0.44
Operating cash flow
$88.43M
Free cash flow
$82.48M
Fetching…
Sources
Revenue
—
Net income
$57.94M
Diluted EPS
0.53
Operating cash flow
$94.36M
Free cash flow
$87.85M
Fetching…
Sources
Revenue
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Net income
$60.30M
Diluted EPS
0.56
Operating cash flow
$77.41M
Free cash flow
$69.54M
Fetching…
Sources
Revenue
—
Net income
$62.20M
Diluted EPS
0.57
Operating cash flow
$58.98M
Free cash flow
$52.49M
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Sources
Revenue
—
Net income
$48.66M
Diluted EPS
0.45
Operating cash flow
$62.07M
Free cash flow
$52.20M
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Sources
Revenue
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Net income
$36.06M
Diluted EPS
0.33
Operating cash flow
$70.42M
Free cash flow
$59.09M
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Sources
Is it cheap or expensive?
Fair value $70.20 vs current price $81.41
Wall Street consensus is the average analyst price target: $147.86 (110.6% higher than our fair-value estimate).
Our most-likely fair value is $70.20 a share — about 13.8% away from today's price of $81.41, so the stock currently looks fairly priced.
Is it drowning in debt?
Healthy
Net cash $803.1M - more cash than debt. Interest coverage 189.5x.
Net debt
$-803.14M
Interest coverage
189.53x
Rambus Inc.'s profit covers its interest bill about 189.5 times over. which is stronger than every peer shown here.
Healthy
Worse cushion
Baseline
Better cushion
RMBS
BASELINE
Rambus Inc.
Total debt $21.80M Interest coverage 189.53x This is the baseline the peer rows are being compared against.
Total debt $2.65B Interest coverage 14.16x -93% vs RMBS Carries about 13.4x less debt cushion than RMBS.
Total debt $10.84B Interest coverage 2.05x -99% vs RMBS Carries about 92.5x less debt cushion than RMBS.
Total debt $38.08M Interest coverage 3.68x -98% vs RMBS Carries about 51.4x less debt cushion than RMBS.
What you should know
The case for and against RMBS
3 Rewards
2 Risks
Rewards
-
Returns 17.8% on equity, ahead of 40% of its peers.
-
Free cash flow was positive in 10/10 years.
-
Trades at 38.2x P/E vs peer median 59.2x (35.5% cheaper).
Risks
-
Stock trades 16.7% above its 5-year average P/E.
-
Insider ownership is only 0.8% (peer median: 1.8%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
38.22x
Forward P/E
21.88x
P/B
6.02x
P/S
11.67x
EV/EBITDA
25.36x
PEG ratio
3.80x
Profitability
How much profit each dollar creates
Gross margin
80.4%
Operating margin
36.7%
Net margin
31.7%
ROE
17.8%
ROA
11.0%
Health
Liquidity and balance-sheet strength
Debt / equity
0.01x
Current ratio
9.75x
Quick ratio
8.90x
Total debt
$21.80M
Total cash
$824.95M
Growth
How the business has been compounding
Revenue TTM
$303.91M
Revenue 5Y CAGR
9.7%
EPS TTM
2.13
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$365.81M
Free CF TTM
$333.18M
FCF margin
109.6%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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