Investors seeking growth at a reasonable cost should explore RAMBUS INC (NASDAQ:RMBS).

RAMBUS INC (NASDAQ:RMBS) has caught the eye of our stock screener as an affordable growth stock. RMBS is displaying robust growth metrics and also excels in terms of profitability, solvency, and liquidity. Additionally, it appears to be reasonably priced. Let's delve into the details.

Growth Examination for RMBS

ChartMill assigns a Growth Rating to every stock. This score ranges from 0 to 10 and evaluates the different growth aspects like EPS and Revenue, both in the past as in the future. RMBS scores a 8 out of 10:

• The Earnings Per Share has grown by an impressive 21.64% over the past year.
• RMBS shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 14.14% yearly.
• RMBS shows a strong growth in Revenue. In the last year, the Revenue has grown by 20.71%.
• RMBS shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 19.59% yearly.
• Based on estimates for the next years, RMBS will show a very strong growth in Earnings Per Share. The EPS will grow by 21.01% on average per year.
• The Revenue is expected to grow by 9.86% on average over the next years. This is quite good.
• The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.

A Closer Look at Valuation for RMBS

ChartMill assigns a proprietary Valuation Rating to each stock. The score is computed by evaluating various valuation aspects, like price to earnings and free cash flow, both absolutely as relative to the market and industry. RMBS was assigned a score of 6 for valuation:

• RMBS's Price/Earnings ratio is a bit cheaper when compared to the industry. RMBS is cheaper than 67.27% of the companies in the same industry.
• RMBS's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. RMBS is cheaper than 70.00% of the companies in the same industry.
• Based on the Enterprise Value to EBITDA ratio, RMBS is valued a bit cheaper than the industry average as 64.55% of the companies are valued more expensively.
• Based on the Price/Free Cash Flow ratio, RMBS is valued a bit cheaper than 75.45% of the companies in the same industry.
• RMBS's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
• The excellent profitability rating of RMBS may justify a higher PE ratio.
• RMBS's earnings are expected to grow with 22.11% in the coming years. This may justify a more expensive valuation.

Health Examination for RMBS

ChartMill assigns a proprietary Health Rating to each stock. The score is computed by evaluating various liquidity and solvency ratios and ranges from 0 to 10. RMBS was assigned a score of 10 for health:

• An Altman-Z score of 15.99 indicates that RMBS is not in any danger for bankruptcy at the moment.
• The Altman-Z score of RMBS (15.99) is better than 88.18% of its industry peers.
• RMBS has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
• A Current Ratio of 8.44 indicates that RMBS has no problem at all paying its short term obligations.
• Looking at the Current ratio, with a value of 8.44, RMBS belongs to the top of the industry, outperforming 92.73% of the companies in the same industry.
• RMBS has a Quick Ratio of 7.89. This indicates that RMBS is financially healthy and has no problem in meeting its short term obligations.
• With an excellent Quick ratio value of 7.89, RMBS belongs to the best of the industry, outperforming 96.36% of the companies in the same industry.

Assessing Profitability for RMBS

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. RMBS was assigned a score of 8 for profitability:

• The Return On Assets of RMBS (13.39%) is better than 85.45% of its industry peers.
• Looking at the Return On Equity, with a value of 16.05%, RMBS is in the better half of the industry, outperforming 78.18% of the companies in the same industry.
• Looking at the Return On Invested Capital, with a value of 13.18%, RMBS belongs to the top of the industry, outperforming 85.45% of the companies in the same industry.
• The last Return On Invested Capital (13.18%) for RMBS is above the 3 year average (9.26%), which is a sign of increasing profitability.
• Looking at the Profit Margin, with a value of 32.31%, RMBS belongs to the top of the industry, outperforming 93.64% of the companies in the same industry.
• In the last couple of years the Profit Margin of RMBS has grown nicely.
• RMBS has a Operating Margin of 33.21%. This is amongst the best in the industry. RMBS outperforms 93.64% of its industry peers.
• In the last couple of years the Operating Margin of RMBS has grown nicely.
• With an excellent Gross Margin value of 80.22%, RMBS belongs to the best of the industry, outperforming 97.27% of the companies in the same industry.

Every day, new Affordable Growth stocks can be found on ChartMill in our Affordable Growth screener.

For an up to date full fundamental analysis you can check the fundamental report of RMBS

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.