Rambus Inc (NASDAQ:RMBS): A Strong Affordable Growth Stock
By Mill Chart
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Rambus Inc (NASDAQ:RMBS) is a semiconductor and IP licensing company that specializes in memory interfaces, security, and sensor technologies. Affordable growth stocks are those that combine solid financial health, strong profitability, and reasonable valuations while still delivering above-average growth. RMBS fits this profile well, making it a candidate worth considering for investors seeking balanced exposure to growth without overpaying.
Strong Growth and Profitability
Rambus Inc (NASDAQ:RMBS) earns a Growth Rating of 8, reflecting its impressive revenue and earnings expansion. Over the past year, revenue grew by 20.71%, while earnings per share (EPS) increased by 21.64%. Analysts expect this momentum to continue, with projected EPS growth of 21.01% annually in the coming years.
The company also scores an 8 in Profitability, supported by industry-leading margins. RMBS boasts a Gross Margin of 80.22%, outperforming 97.25% of its semiconductor peers. Its Operating Margin (33.21%) and Profit Margin (32.31%) are equally strong, ranking in the top 7% of the sector.
Excellent Financial Health
With a Health Rating of 10, RMBS demonstrates financial stability. The company has no debt, a Current Ratio of 8.44, and a Quick Ratio of 7.89, indicating ample liquidity to cover short-term obligations. Its Altman-Z score of 15.39 further confirms low bankruptcy risk.
Reasonable Valuation
Despite strong fundamentals, RMBS remains reasonably priced with a Valuation Rating of 6. Its P/E ratio of 23.50 is below the industry average, and its Forward P/E of 16.61 is cheaper than 74.31% of semiconductor stocks. The PEG ratio, which accounts for growth, suggests the stock is undervalued relative to its earnings potential.
For a deeper dive into RMBS’s financials, check the full Fundamental Analysis Report.
Affordable Growth Screen Results
Rambus Inc (NASDAQ:RMBS) was identified using an Affordable Growth screen, which filters for stocks with strong growth, solid profitability, healthy balance sheets, and reasonable valuations.
