Strong and Rising: Rambus Stock May Have More Upside
Rambus (RMBS) stock might be a good candidate to ride the momentum. Why? Because you get strong margin, low-debt capital structure, reasonable valuation, and strong momentum. Here is some data.
- Revenue Growth: Rambus saw revenue growth of 35.2% LTM and 18.7% last 3 year average.
- Long-Term Profitability: About 45.9% operating cash flow margin and 26.4% operating margin last 3 year average.
- Strong Momentum: Currently in top 10 percentile of stocks in terms of “trend strength” – our proprietary momentum metric.
- Room To Run: Despite its momentum, RMBS stock is trading 8.6% below its 52-week high.
While revenue growth helps, this selection is all about riding momentum with quality – which we judge by margins (reflective of pricing power / strong business model) and capital structure (not too debt heavy).
As a quick background, Rambus provides semiconductor products globally, including in the US, Asia, Europe, and Canada, marketed through direct sales and distributors.
| RMBS | S&P Median | |
|---|---|---|
| Sector | Information Technology | – |
| Industry | Semiconductors | – |
| PS Ratio | 16.4 | 3.2 |
| PE Ratio | 46.1 | 23.9 |
|
|
||
| LTM* Revenue Growth | 35.2% | 5.2% |
| 3Y Average Annual Revenue Growth | 18.7% | 5.3% |
|
|
||
| LTM* Operating Margin | 36.3% | 18.6% |
| 3Y Average Operating Margin | 26.4% | 17.8% |
| LTM* Op Cash Flow Margin | 45.4% | 20.3% |
| 3Y Average Op Cash Flow Margin | 45.9% | 19.8% |
|
|
||
| DE Ratio | 0.3% | 21.7% |
*LTM: Last Twelve Months
- Salesforce’s Pivot: Why “Agentforce” Matters More Than the Earnings Beat
- RBRK Stock Analysis: Strong Growth Meets Rich Valuation
- Why Zscaler’s 27% Crash Is the Ultimate Test for Software Investors
- Snowflake Stock: AI Winner?
- Will The Rally In SMX Stock Continue?
- Applied Digital Stock: A $9 Billion Bet on the AI Buildout
But do these numbers tell the full story? Read Buy or Sell RMBS Stock to see if Rambus still has an edge that holds up under the hood.
Single stock can be risky, but there is a huge value to a broader diversified approach we take with Trefis High Quality Portfolio. Let us ask you this: Over the last 5 years, which index do you think the Trefis High Quality Portfolio outperformed – the S&P 500, S&P 1500 Equal Weighted, or both? The answer might surprise you. See how our advisory framework helps stack the odds in your favor.
Stocks Like These Can Outperform. Here Is Data
Here is how we make the selection: We consider stocks with > $2 Bil in market cap, high operating and cfo (cash flow from operations) margin, no instance of more than 15% revenue decline in the past 5 years, reasonable valuation, low-debt capital structure, and strong momentum as defined by our proprietry momentum metric.
Below are statistics for stocks with this selection strategy applied between 12/31/2016 and 6/30/2025.
- Average 12-month forward returns of nearly 15%
- 12-month win rate (percentage of picks returning positive) of about 60%
But Consider The Risk
That said, RMBS isn’t immune to big drops. It plunged nearly 96% in the Dot-Com bubble and almost 80% during the Global Financial Crisis. Even the smaller pullbacks, like the 2018 correction and Covid selloff, punched it down around 50% and 45%, respectively. The inflation shock wiped out close to 39%. So, while RMBS may look solid, it still takes serious hits when markets turn.
But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read RMBS Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.
The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.