Investors should take note of NASDAQ:RMBS, a growth stock that remains attractively priced.

Here's RAMBUS INC (NASDAQ:RMBS) for you, a growth stock our stock screener believes is undervalued. NASDAQ:RMBS is scoring impressively in terms of growth while demonstrating strong financials. On top of that, it remains attractively priced. Let's break it down further.

Assessing Growth Metrics for NASDAQ:RMBS

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. NASDAQ:RMBS has earned a 7 for growth:

• RMBS shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 14.14% yearly.
• Looking at the last year, RMBS shows a very strong growth in Revenue. 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 20.68% on average per year.
• RMBS is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 9.86% yearly.
• The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.

Unpacking NASDAQ:RMBS's Valuation Rating

ChartMill assigns a Valuation Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing different valuation elements, such as price to earnings and free cash flow, both in absolute terms and relative to the market and industry. In the case of NASDAQ:RMBS, the assigned 5 reflects its valuation:

• Based on the Price/Forward Earnings ratio, RMBS is valued a bit cheaper than 62.96% of the companies in the same industry.
• RMBS's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 94.48.
• 73.15% of the companies in the same industry are more expensive than RMBS, based on the Price/Free Cash Flow ratio.
• RMBS has an outstanding profitability rating, which may justify a higher PE ratio.
• RMBS's earnings are expected to grow with 20.68% in the coming years. This may justify a more expensive valuation.

Health Insights: NASDAQ:RMBS

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. NASDAQ:RMBS has received a 10 out of 10:

• An Altman-Z score of 21.33 indicates that RMBS is not in any danger for bankruptcy at the moment.
• Looking at the Altman-Z score, with a value of 21.33, RMBS belongs to the top of the industry, outperforming 88.89% of the companies in the same industry.
• 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 8.26 indicates that RMBS has no problem at all paying its short term obligations.
• The Current ratio of RMBS (8.26) is better than 93.52% of its industry peers.
• A Quick Ratio of 7.60 indicates that RMBS has no problem at all paying its short term obligations.
• RMBS has a Quick ratio of 7.60. This is amongst the best in the industry. RMBS outperforms 93.52% of its industry peers.

Evaluating Profitability: NASDAQ:RMBS

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, NASDAQ:RMBS has achieved a 8:

• RMBS has a Return On Assets of 14.08%. This is amongst the best in the industry. RMBS outperforms 83.33% of its industry peers.
• RMBS has a better Return On Equity (16.96%) than 77.78% of its industry peers.
• With an excellent Return On Invested Capital value of 12.60%, RMBS belongs to the best of the industry, outperforming 82.41% of the companies in the same industry.
• The last Return On Invested Capital (12.60%) for RMBS is above the 3 year average (9.24%), which is a sign of increasing profitability.
• RMBS has a better Profit Margin (34.03%) than 94.44% of its industry peers.
• RMBS's Profit Margin has improved in the last couple of years.
• The Operating Margin of RMBS (31.88%) is better than 92.59% of its industry peers.
• In the last couple of years the Operating Margin of RMBS has grown nicely.
• RMBS has a better Gross Margin (80.16%) than 97.22% of its industry peers.

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.