This Analyst Sees 61% Upside In Rambus As It's Well Positioned To Benefit From DRAM Demand

  • Rosenblatt analyst Kevin Cassidy initiated coverage of Rambus Inc RMBS with a Buy rating and $35 price target, implying a 60.55% upside.
  • Cassidy believes Rambus is well-positioned to benefit from the increasing demand for high-performance DRAM in data systems, particularly artificial intelligence applications. 
  • The company's long-term IP Licensing contracts generate predictable and significant cash from operations, Cassidy says.
  • Cassidy finds the current valuation trading well below its peer group.
  • Separately the semiconductor solutions provider announced the exit of CFO Rahul Mathur on November 15 to pursue another opportunity. However, Rambus affirmed its Q3 FY21 outlook.
  • Rambus sees Q3 licensing billings of $59 million - $65 million. Rambus sees royalty revenue of $25 million - $31 million, product revenue of $34 million - $40 million, and contract and other revenue of $11 million - $17 million.
  • Price Action: RMBS shares traded higher by 3.05% at $22.47 in the market session on the last check Thursday.
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