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

Uncover the potential of RAMBUS INC (NASDAQ:RMBS), a growth stock that our stock screener found to be reasonably priced. RMBS is excelling in growth aspects, maintaining a healthy financial position, and still offers an attractive valuation. We'll examine each aspect in detail.

Assessing Growth for RMBS

To evaluate a stock's growth potential, ChartMill utilizes a Growth Rating on a scale of 0 to 10. This comprehensive assessment considers various growth aspects, including historical and estimated EPS and revenue growth. RMBS has achieved a 7 out of 10:

• Measured over the past years, RMBS shows a quite strong growth in Earnings Per Share. The EPS has been growing by 14.14% on average per year.
• 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.
• The Earnings Per Share is expected to grow by 21.01% on average over the next years. This is a very strong growth
• 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.

Assessing Valuation Metrics for RMBS

To assess a stock's valuation, ChartMill utilizes a Valuation Rating on a scale of 0 to 10. This comprehensive assessment considers various valuation aspects, comparing price to earnings and cash flows, while factoring in profitability and growth. RMBS has achieved a 6 out of 10:

• Based on the Price/Earnings ratio, RMBS is valued a bit cheaper than the industry average as 62.39% of the companies are valued more expensively.
• Based on the Price/Forward Earnings ratio, RMBS is valued a bit cheaper than 72.48% of the companies in the same industry.
• Based on the Enterprise Value to EBITDA ratio, RMBS is valued a bit cheaper than 66.06% of the companies in the same industry.
• Based on the Price/Free Cash Flow ratio, RMBS is valued a bit cheaper than the industry average as 75.23% of the companies are valued more expensively.
• RMBS's 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.
• RMBS's earnings are expected to grow with 22.11% in the coming years. This may justify a more expensive valuation.

A Closer Look at Health for RMBS

ChartMill employs a unique Health Rating system for all stocks. This rating, ranging from 0 to 10, is determined by analyzing various liquidity and solvency ratios. For RMBS, the assigned 10 for health provides valuable insights:

• RMBS has an Altman-Z score of 14.56. This indicates that RMBS is financially healthy and has little risk of bankruptcy at the moment.
• With an excellent Altman-Z score value of 14.56, RMBS belongs to the best of the industry, outperforming 88.99% 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 8.44 indicates that RMBS has no problem at all paying its short term obligations.
• RMBS has a Current ratio of 8.44. This is amongst the best in the industry. RMBS outperforms 94.50% of its industry peers.
• RMBS has a Quick Ratio of 7.89. This indicates that RMBS is financially healthy and has no problem in meeting its short term obligations.
• RMBS has a better Quick ratio (7.89) than 96.33% of its industry peers.

How do we evaluate the Profitability for RMBS?

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of RMBS, the assigned 8 is noteworthy for profitability:

• RMBS's Return On Assets of 13.39% is amongst the best of the industry. RMBS outperforms 84.40% of its industry peers.
• RMBS has a Return On Equity of 16.05%. This is in the better half of the industry: RMBS outperforms 78.90% of its industry peers.
• RMBS has a better Return On Invested Capital (13.18%) than 85.32% of its industry peers.
• The 3 year average ROIC (9.26%) for RMBS is below the current ROIC(13.18%), indicating increased profibility in the last year.
• RMBS's Profit Margin of 32.31% is amongst the best of the industry. RMBS outperforms 93.58% of its industry peers.
• RMBS's Profit Margin has improved in the last couple of years.
• The Operating Margin of RMBS (33.21%) is better than 93.58% of its industry peers.
• RMBS's Operating Margin has improved in the last couple of years.
• RMBS's Gross Margin of 80.22% is amongst the best of the industry. RMBS outperforms 97.25% of its industry peers.

Every day, new Affordable Growth stocks can be found on ChartMill in our Affordable Growth screener.

Our latest full fundamental report of RMBS contains the most current fundamental analsysis.

Keep in mind

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.