RAMBUS INC (NASDAQ:RMBS) is showing good growth, while it is not too expensive.

Discover RAMBUS INC (NASDAQ:RMBS), an undervalued growth gem identified by our stock screener. NASDAQ:RMBS is shining in terms of growth metrics, and it's also displaying strong financial health and profitability. What's more, it retains an appealing valuation. We'll break it down further.

How do we evaluate the Growth for NASDAQ:RMBS?

A key component of ChartMill's stock assessment is the Growth Rating, which spans from 0 to 10. This rating evaluates diverse growth factors, such as EPS and revenue growth, considering both past performance and future projections. NASDAQ:RMBS has received a 7 out of 10:

• The Earnings Per Share has been growing by 14.14% on average over the past years. This is quite good.
• The Revenue has grown by 20.71% in the past year. This is a very strong growth!
• Measured over the past years, RMBS shows a quite strong growth in Revenue. The Revenue has been growing by 19.59% on average per year.
• RMBS is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 22.11% yearly.
• RMBS is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 9.86% yearly.
• When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

ChartMill's Evaluation of Valuation

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. NASDAQ:RMBS was assigned a score of 6 for valuation:

• Compared to the rest of the industry, the Price/Earnings ratio of RMBS indicates a somewhat cheap valuation: RMBS is cheaper than 65.74% of the companies listed in the same industry.
• 73.15% of the companies in the same industry are more expensive than RMBS, based on the Price/Forward Earnings ratio.
• Based on the Enterprise Value to EBITDA ratio, RMBS is valued a bit cheaper than the industry average as 64.81% of the companies are valued more expensively.
• Based on the Price/Free Cash Flow ratio, RMBS is valued a bit cheaper than the industry average as 79.63% of the companies are valued more expensively.
• The 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.
• A more expensive valuation may be justified as RMBS's earnings are expected to grow with 22.11% in the coming years.

Evaluating Health: NASDAQ:RMBS

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NASDAQ:RMBS scores a 10 out of 10:

• An Altman-Z score of 17.03 indicates that RMBS is not in any danger for bankruptcy at the moment.
• The Altman-Z score of RMBS (17.03) is better than 87.04% 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.
• RMBS has a Current Ratio of 8.26. This indicates that RMBS is financially healthy and has no problem in meeting its short term obligations.
• RMBS has a Current ratio of 8.26. This is amongst the best in the industry. RMBS outperforms 93.52% of its industry peers.
• RMBS has a Quick Ratio of 7.60. This indicates that RMBS is financially healthy and has no problem in meeting its short term obligations.
• With an excellent Quick ratio value of 7.60, RMBS belongs to the best of the industry, outperforming 93.52% of the companies in the same industry.

A Closer Look at Profitability for NASDAQ: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. NASDAQ:RMBS was assigned a score of 8 for profitability:

• Looking at the Return On Assets, with a value of 14.08%, RMBS belongs to the top of the industry, outperforming 84.26% of the companies in the same industry.
• RMBS has a better Return On Equity (16.96%) than 78.70% of its industry peers.
• RMBS's Return On Invested Capital of 12.60% is amongst the best of the industry. RMBS outperforms 82.41% of its industry peers.
• 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.
• The Profit Margin of RMBS (34.03%) is better than 94.44% of its industry peers.
• RMBS's Profit Margin has improved in the last couple of years.
• Looking at the Operating Margin, with a value of 31.88%, RMBS belongs to the top of the industry, outperforming 92.59% of the companies in the same industry.
• In the last couple of years the Operating Margin of RMBS has grown nicely.
• RMBS has a Gross Margin of 80.16%. This is amongst the best in the industry. RMBS outperforms 97.22% of its industry peers.

More Affordable Growth stocks can be found in our Affordable Growth screener.

Check the latest full fundamental report of RMBS for a complete fundamental analysis.

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.