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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Rambus Inc. (XNAS:RMBS) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
RMBS
Name:
RAMBUS INC. (XNAS:RMBS)
Sector:
37.93M
Industry:
Semiconductors
CEO:
Mr. Luc Seraphin
Total Employees:
690
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is -22.06% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF RAMBUS INC.(RMBS) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SEMICONDUCTORS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
24.68
One Month Price Target:
$24.85
Six Month Price Target :
$25.68
Likely Price in One Year's Time:
Ticker:
$26.67
Likely Trading Range Today Under (Normal Volatility)
$24.6
Price Upper limit ($) :
$24.83
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$23.34
This week:
$21.67
This month :
$18.67
Other Primary facts
Market Cap:
2.72B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
110.53M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
16.09%
-15.08%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$30.91
$28.01
$18.45
$21.35
Medium risk (<10%) entry points
Buy Call
Sell Call
$27.06
Buy Put:
Sell Put:
$26.44
$22.29
$22.92
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
RMBS
Sharpe Ratio:
4.43%
Comparison:
RMBS, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 43.05% higher than the industry
& ratio is 94.32% higher than the market/S&P 500 average
Average Returns/Yield of
RMBS
Daily returns:
0.13%
Weekly returns:
0.65%
Monthly returns:
2.58%
Yearly returns:
31.95%
Comparison of returns:
Average annual returns/yield (last 3 years) is -3.01% below industry average
Classification:
RMBS, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.61
Statistical test of Returns:
RMBS has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.71%
Weekly Volatility:
6.07%
Monthly Volatility:
12.14%
Yearly Volatility:
42.06%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
2.43%
Volatility in last five trading days has been -10.40% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.45%
Weekly VaR:
-12.18%
Monthly VaR:
-24.36%
How Much Can the price of
RMBS
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-20%
Worst case (decline):
-84.38%
This translates to price declining to:
$19.73
This translates to price declining to:
$3.85
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
RMBS is a 71.92% riskier investment compared to the market/S&P 500 & is 47.28% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -23.50% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
RMBS
Beta in relation to market/S&P 500--1.20
Expected beta in 1 year's time:
0.698
Expected beta in 3 year's time:
0.987
Unlevered (debt free) Beta:
1.156
Beta in relation to Nasdaq (XNAS):
1.097
Beta in relation to all global stocks::
0.856
Beta Comparison & Analysis
Beta of competitors/peers::
1.302
Beta is -7.61% lower than peers
Average Industry Beta:
1.41
Beta is -14.73% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
2.13%
Sustainable growth rate is -92.31% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.196
Alpha is 2.41% above industry average alpha yield
Alpha is 1247% higher than market/& is unsustainably high
Analysis of Cost of Capital of
RMBS
Equity cost of capital:
0.114
Equity cost of capital is -11.11% below industry mean WACC
Unlevered (without debt) cost of capital:
10.94%
Before-tax cost of debt:
8.08%
After-tax cost of debt:
6.38%
Overall debt rating:
Non-investment grade (junk/speculative grade
Weighted average cost of capital (WACC):
6.38%
WACC is 4.50% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$3.23
Revenue growth rate per share of (3Y):
3.44
Annual revenue growth rate is 39.46% above the industry average
EPS:
-$0.42
Expected Annual growth rate of EPS (3Y):
0.00%
-
Free cash flow (FCF) per share:
$1.88
-
-
Debt per share
$0.25
EBITDA per share
$0.12
Valuation Analysis Today of
RMBS
P/E Ratio:
156.2
P/E Ratio of Competitors/Peers:
190.27
P/E ratio is -17.90% lower than main peers & is 276.61% higher than the industry
-
RMBS is -241.67% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
7.64
Price to sales ratio is -5.98% below the industry mean
P/B (Price to book value ratio):
3.44
Price to free cash flow: 13.16
Price to free cash flow ratio is -70.73% lower than the industry
Net income growth rate (3Y):
-111.53%
Net income growth rate is 94.71% higher than the average industry net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
3.52%
Net debt to equity ratio:
-9.01%
Debt to assets ratio:
2.63%
Net debt to assets ratio:
-6.74%
Debt-to-asset ratio is -93.24% below industry average
Ability to repay debt:
Interest coverage ratio:
1.57
Interest coverage ratio is -95.20% less than industry average
Looking forward:
Debt growth rate:
-15.23%
Annual debt growth is -117% lower than industry average debt growth rate
Debt repayment rate in last quarter: 86.20%
Analysis of Key Statistics
Correlation of price movement with the market:
0.715
Statistical significance of correlation:
RMBS has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.627
Stock price is 14.03% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.627
Correlation of price movement with Nasdaq (^IXIC):
0.017
Covariance of price movement with the market:
0.026
Kurtosis
5.432
Returns have moderate fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.162
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
RMBS
Gross Profit Margin Ratio:
316%
Operating Profit Margin Ratio:
10.11%
Operating profit margin is -57.04% lower than the industry
Net Profit Margin Ratio:
316%
Effective Tax Rate:
-15.19%
Effective tax rate is -200.64% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
-5.71%
Return on equity (ROE) is -119.96% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
-4.27%
Return on assets (ROA) is -132.42% lower than the industry
Financial Leverage:
1.0x
Current Ratio:
3.24
Current ratio is -20.29% below industry average
Cash Conversion Cycle (days):
152.1
Cash conversion cycle is 175.72% above industry average
The remaining useful life of property plant & equipment is: 4.0 years
Stock based compensation to net income ratio:
-17.18%
In-depth Efficiency Analysis
Revenue generated per employee:
517.4K
Each employee generates -16% less revenue than industry average revenue per employee
EBITDA generated per employee:
19.8K
Each employee generates -91% less EBITDA than industry average revenue per employee
Profit generated per employee:
- 65.6K
Each employee generates -141% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
55.0K
Each employee generates 98% more free cash flow than industry average revenue per employee
Assets/Capital per employee
747.5K
Each employee generates 98% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- -2.97%
Growth rate in R&D investment/expenditure is -121.01% lower than the industry
Competitors/Peer firms of
RMBS
SABRE CORPORATION (XNAS:SABR)
MANTECH INTERNATIONAL CORPORATION (XNAS:MANT)
COMMVAULT SYSTEMS, INC. (XNAS:CVLT)
ITRON, INC. (XNAS:ITRI)
Cerence Inc. (XNAS:CRNC)
SILICON MOTION TECHNOLOGY CORPORATION (XNAS:SIMO)
Rackspace Technology, Inc. (XNAS:RXT)
ACV AUCTIONS INC. (XNAS:ACVA)
KINGSOFT CLOUD HOLDINGS LIMITED (XNAS:KC)
Current Analyst Ratings
Strong buy�4%
Buy�13%
Hold�8%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
356.97M
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
75.44M
281.53M
143.14M
71.30M
94.40M
-
1.41M
238.95M
8.09M
8.70M
44.29M
13.69M
36.09M
- 45271.00K
- 39302.00K
5.97M
- 45271.00K
Statement of Cash Flow
Date:
Period:
10.83M
Differed Income Tax :
648.00K
Stock Based Compensation :
7.78M
Change in Working Capital :
12.49M
Accounts Receivables:
- 7167.00K
Other Working Capital:
- 4152.00K
Other Non-Cash Items:
77.09M
Net Cash Provided by Operating Activities:
42.61M
Investments in PP&E:
- 1683.00K
Net Acquisitions:
-
Purchases of Investments:
- 39433.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
179.13M
164.56M
343.69M
182.98M
6.16M
12.28M
545.11M
77.68M
279.79M
57.63M
-
3.99M
96.67M
515.76M
-
1.06B
15.54M
79.71M
21.02M
20.62M
52.52M
168.40M
27.94M
46.84M
99.35M
-
267.75M
110.00K
- 475024.00K
- 4313.0K
-
March 31, 2022 at 6:00:00 AM
314.39M
793.13M
1.06B
-
107.65M
- 71476.0K
248.87M
- 3000.00K
204.76M
- 174454.00K
-
-
-
- 1453.00K
- 175907.00K
- 224.00K
71.24M
179.50M
108.26M
42.61M
- 4683.00K
37.93M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
RMBS
2023
2024
2025
2026
2027
$26.75
$28.92
$31.25
$33.78
$36.51