The comps finally caught up with Rambus. The chipmaker reported earnings growth ranging from 11% to 79% at the tail-end of last year and early this year, accompanied by strong sales. Then Rambus last quarter saw a dip in both earnings and sales, compared to the same quarter a year ago. Still, the memory-chip maker boasts excellent ratings and Rambus stock got an improvement in its IBD SmartSelect Composite Rating Monday, from 94 to a near-best 96.
The upgraded Composite Rating tells you the chipmaker is now outperforming 96% of all stocks, regardless of industry, in terms of the most important fundamental and technical stock-picking criteria. History shows the top market performers tend to have a 95 or higher score as they launch their major moves.
Rambus Stock In Buy Zone
Rambus is currently in a buy zone, about 2% above a 51.88 entry from a consolidation. Its stock bottomed at 20 on July 5, 2022, several months before of the end of the bear market. From there it's more than doubled was trading at 53.91 Tuesday midday. In fact, it more than tripled to 68.54 on May 31, then it plunged 12% on Aug. 1 on the weak Q2 earnings report. Last week it started to recover from that drop.
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San Jose, Calif.-based small-cap Rambus stock boasts a top-notch 97 Composite Rating. The Composite Rating combines five separate proprietary IBD ratings, based on key fundamental and technical criteria, into one easy-to-use score. The best growth stocks have a Composite Rating of 90 or better.
Its 91 Earnings Per Share Rating means its recent quarterly and annual earnings growth is outpacing 91% of all stocks. The Accumulation/Distribution Rating of C+ for Rambus stock shows slightly more buying of its shares than selling by institutional investors over the last 13 weeks.
Off Quarter An Outlier?
Rambus reported a 3% dip in earnings-per-share for Q2, to 31 cents per share. The prior three periods its EPS rose 79%, 39% and 11%. See whether it returns to earnings growth for the current quarter. Revenue slid 1% year over year to $119.9 million last quarter. That followed gains of 38%, 33% and 15%.
Rambus holds the No. 3 rank among its peers in the 36-company Electronics-Semiconductor Fabless industry group, according to IBD Stock Checkup. Programmable logic device maker Lattice Semiconductor is the top-ranked stock in the group. Allegro MicroSystems, a maker of sensors and power management chips for autos, is No. 2 in the group.
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