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Investing.com - Rosenblatt raised its price target on Rambus Inc . (NASDAQ:RMBS) to $90.00 from $80.00 on Tuesday, while maintaining a Buy rating on the stock. According to InvestingPro data, the stock has already delivered an impressive 21.53% return year-to-date, supported by strong financial health metrics.
The firm cited Rambus’s strong quarterly performance as evidence of the effectiveness of management’s product strategy. Rosenblatt views Rambus as an "under-the-radar AI opportunity" whose intellectual property and products are critical for enhancing AI system performance. The company’s impressive 81.92% gross profit margin and robust 30.13% revenue growth support this positive outlook.
Rosenblatt expects demand for high-performance DRAM and memory interfaces to accelerate as the AI inference market expands. The firm noted that Rambus currently trades at approximately 23x forward earnings.
The research firm highlighted Rambus’s financial strengths, including its approximately 55% cash conversion margin, 45% operating margins, and double-digit revenue growth. Rosenblatt pointed out that comparable peers with similar margin profiles typically trade at a 40% higher forward P/E multiple.
The new $90 price target represents a 30x multiple applied to Rosenblatt’s projected calendar year 2026 non-GAAP earnings per share for Rambus.
In other recent news, Rambus Inc. reported its second-quarter 2025 financial results, showing a mixed outcome. The company missed earnings per share (EPS) expectations, posting an EPS of $0.53 compared to the anticipated $0.58, which marks an 8.62% negative surprise. On the positive side, Rambus exceeded revenue projections, bringing in $172.2 million against the forecasted $166.97 million. Despite the EPS miss, the strong revenue figures contributed to a rise in Rambus stock in aftermarket trading. Additionally, optimistic forward guidance from the company may have influenced investor sentiment positively. These developments are crucial for investors monitoring the company’s performance.
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