Rambus: A Strong Buy - Analyst Blog
March 28 2014 - 10:00AM
Zacks
On Mar 28, 2014, Zacks Investment Research upgraded
Rambus Inc. (RMBS) to a Zacks Rank #1 (Strong
Buy). The upgrade followed positive estimate revisions over the
last 60 days.
Why the Upgrade?
Year-to-date, Rambus’ shares increased 11.8% while the 1-year
return is a stupendous 90.5%. Some of the optimism can be
associated with the recent licensing deals between the company and
several semiconductor manufacturers.
Recently, Rambus signed a 5-year patent licensing agreement with
Nanya Technology Corporation, a DRAM solutions provider. Rambus’
patented technologies are of great importance to chipmakers for
manufacturing advanced chips used in computers and electronic
goods. The company’s technology patents are being used by Fujitsu
Semiconductor Ltd., NVIDIA Corp. (NVDA),
Broadcom Corp. (BRCM), Micron Technology and
MediaTek Inc. for their respective integrated circuit products.
In the beginning of 2014, Rambus signed a 10-year licensing
agreement with Samsung Electronics. Per the agreement, Samsung will
use Rambus’ integrated chip technologies and security technologies
in its devices such as tablets, smartphones and set-top boxes
though 2023.
Thus, these licensing agreements are a recurring revenue source
for Rambus — the result of successful monetizing of its
patents.
In the fourth quarter of fiscal 2013, the company reported
customer licensing income (including patent royalties received and
gain from settlements) of $73.8 million compared with $61.6 million
in the year-ago quarter. Moreover, the company expects to introduce
several innovative products and services in 2014 that would support
its revenue growth, going forward.
Additionally, the company witnessed positive estimate revisions
for the current quarter. Out of the two estimates, one was revised
upwards over the past 60 days. This led to a significant increase
in the Zacks Consensus Estimate, which now stands at 1 cent for the
current quarter up from a loss of 7 cents over the same period of
time.
Investors may also consider Juniper Networks
(JNPR) which sports the same Zacks Rank as Rambus.
BROADCOM CORP-A (BRCM): Free Stock Analysis Report
JUNIPER NETWRKS (JNPR): Free Stock Analysis Report
NVIDIA CORP (NVDA): Free Stock Analysis Report
RAMBUS INC (RMBS): Free Stock Analysis Report
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