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Investing.com - Evercore ISI raised its price target on Rambus Inc. (NASDAQ:RMBS) to $114.00 from $81.00 on Tuesday, while maintaining an Outperform rating on the semiconductor company’s stock. The company, which has delivered an impressive 79.5% return year-to-date and maintains a "GREAT" financial health score according to InvestingPro, continues to show strong momentum.
The significant price target increase reflects Evercore’s view that Rambus deserves a higher price-to-earnings multiple compared to its current valuation, which sits below the Philadelphia Semiconductor Index (SOX) and most compute and analog players. Currently trading at a P/E ratio of 45.6x and showing robust revenue growth of 35.2% in the last twelve months, the stock appears to be trading above its Fair Value based on InvestingPro’s comprehensive analysis.
Evercore argues that a mid-30s NTM (next twelve months) PE multiple is warranted for Rambus given the company’s projected three-year compound annual growth rate (CAGR) of 16% for revenue and 18% for earnings per share.
The firm also highlighted Rambus’s strong free cash flow generation, which is expected to exceed $300 million in calendar year 2025 and grow at a 15% CAGR thereafter.
The new $114 price target is based on Evercore’s projection of $4.04 earnings per share for calendar year 2028, applying a 34x NTM PE multiple, and discounting back two years at a 10% discount rate.
In other recent news, Rambus Inc . reported its second-quarter 2025 earnings, which presented a mixed financial picture. The company missed earnings per share expectations, reporting $0.53 against a forecast of $0.58. However, revenue exceeded projections, coming in at $172.2 million compared to the expected $166.97 million. In a notable move, Baird analyst Tristan Gerra raised his price target for Rambus to a street-high of $120, citing anticipated product revenue growth catalysts in the latter half of 2026. Susquehanna also adjusted its price target for Rambus to $75, highlighting strong intellectual property growth and maintaining a Positive rating. Meanwhile, Rosenblatt increased its price target to $90, emphasizing the company’s robust quarterly performance and its potential in AI. These developments reflect positive sentiment from analysts regarding Rambus’s strategic direction and financial health.
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