Rambus Inc. (RMBS)
Valuation Overview•Is Rambus Inc. Overvalued or Undervalued?
Trading at a discount compared to peers, but the underlying intrinsic cash flows struggle to support the current price.
High-quality fundamentals with a strong composite quality score of 93/100, backed by robust profitability and solvency.
Wall Street forecasts a balanced outlook with consensus price targets near the current price.
Verdict: Elite compounder with fortress-level fundamentals across every core pillar.
Wall Street sentiment is generally neutral alongside robust expected earnings growth. However, capital return yields remain modest, driven predominantly by aggressive share repurchases.
RMBS exhibits elite business quality, driven by exceptional capital efficiency and highly lucrative margins. This is backed by a fortress balance sheet, holding significant net cash ($139M) and minimal debt risk.
The company is driving exceptional top-line expansion (15.9% 3Y CAGR) paired with stable bottom-line earnings. This growth is supported by elite operational efficiency, sustaining an impressive 35.9% operating margin.
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $180.2M | +27.1% | +15.9% | +23.5% | +9.1% | |
| EBITDA | $63.4M | — | +31.8% | — | — | |
| Net Income | $59.9M | +28.2% | — | — | +0.9% | |
| EPS (Diluted) | $0.55 | +27.9% | — | — | +1.6% | |
| Free Cash Flow | $71.6M | +66.7% | +16.6% | +16.4% | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 77.0% | 73.5% | 71.9% | 71.8% |
| Operating Margin | 35.9% | 29.6% | 23.1% | 5.3% |
| Net Margin | 31.9% | 45.8% | 27.9% | 1.1% |
| FCF Margin | 46.5% | 40.1% | 45.2% | 42.9% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $0.61 | $0.63 | +3.3% | ||
| Q1'26 | $0.68 | $0.68 | +0.0% | ||
| Q4'25 | $0.63 | $0.63 | +0.0% | ||
| Q3'25 | $0.61 | $0.60 | -1.6% | ||
| Q2'25 | $0.55 | $0.59 | +7.3% | ||
| Q1'25 | $0.58 | $0.59 | +1.7% | ||
| Q4'24 | $0.51 | $0.51 | +0.0% | ||
| Q3'24 | $0.45 | $0.42 | -6.7% |
Total return is +133.1% (1Y), outperforming the benchmark by +108.2%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | +42.2% | +32.9% | — |
| 1Y | +133.1% | +108.2% | — |
| 3YCAGR | +33.1% | +10.0% | — |
| 5YCAGR | +44.7% | +29.9% | — |
| 10YCAGR | +27.9% | +13.4% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about Rambus Inc. (RMBS) valuation, health, and returns.
Rambus Inc. is estimated to be overvalued under our discounted cash flow framework. relative multiples indicate the stock is Cheap versus peers compared to industry peers. overvalued (implying -50.2% downside from DCF intrinsic value of $70.33)
Rambus Inc. has multiple valuation anchors: DCF Intrinsic Value: $70.33 | Peer Relative Fair Value: $577.53 | Wall Street Analyst Target: $135.67 (implying -3.9% upside). A convergence of these signals offers higher conviction.
Rambus Inc. displays excellent financial health with a composite quality score of 93/100, supported by a Altman Z-Score of 57.2 (safe zone), Piotroski F-Score of 6/9, Return on Invested Capital (ROIC) of 17.1%.
Rambus Inc. does not return material capital to shareholders via dividends or share repurchases, electing to retain earnings to fund internal growth.
Rambus Inc.'s current growth trajectory is Accelerating. The company achieved +27.1% 1Y revenue growth and +27.9% 1Y EPS growth, compared to its 3Y revenue CAGR of +15.9%.
Wall Street consensus is Buy based on 14 analysts, beating EPS expectations in 50% of recent quarters with a 1-quarter streak. The consensus price target represents a -3.9% change from current levels.
Investment risks for Rambus Inc. include: -36.7% 1-year max drawdown, high beta (3.37x market volatility). Volatility risk is characterized by a beta of 3.37x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.