Declining Stock and Solid Fundamentals: Is The Market Wrong About Rambus Inc. (NASDAQ:RMBS)?

Simply Wall St.04-03

With its stock down 7.8% over the past month, it is easy to disregard Rambus (NASDAQ:RMBS). But if you pay close attention, you might gather that its strong financials could mean that the stock could ...

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(NASDAQ:RMBS)?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-04-03 18:29 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://finance.yahoo.com/news/declining-stock-solid-fundamentals-market-102957571.html><strong>Simply Wall St.</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>With its stock down 7.8% over the past month, it is easy to disregard Rambus (NASDAQ:RMBS). But if you pay close attention, you might gather that its strong financials could mean that the stock could ...</p>\n\n<a href=\"https://finance.yahoo.com/news/declining-stock-solid-fundamentals-market-102957571.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"TQQQ","symbol_name":"纳指三倍做多ETF","start_time":0,"source_url":"https://finance.yahoo.com/news/declining-stock-solid-fundamentals-market-102957571.html","article_id":"2424818489","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/5Tyy8Oun7d69.ebTzNgpXA--~B/aD00MzI7dz0xMTk0O2FwcGlkPXl0YWNoeW9u/https://media.zenfs.com/en/simply_wall_st__316/ce85212c51bd88fd1fdcd0febb642a4a"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2424818489","pubTimestamp":1712140197,"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":"With its stock down 7.8% over the past month, it is easy to disregard Rambus . But if you pay close attention, you might gather that its strong financials could mean that the stock could potentially see an increase in value in the long-term, given how markets usually reward companies with good financial health. Specifically, we decided to study Rambus'  ROE in this article.Return on equity or ROE is an important factor to be considered by a shareholder because it tells them how effectively their capital is being reinvested. Simply put, it is used to assess the profitability of a company in relation to its equity capital.Return on Equity = Net Profit  ÷ Shareholders' Equity. So, based on the above formula, the ROE for Rambus is:. Rambus doesn't pay any dividend to its shareholders, meaning that the company has been reinvesting all of its profits into the business. This is likely what's driving the high earnings growth number discussed above.","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"TQQQ":"纳指三倍做多ETF","NDAQ":"纳斯达克OMX交易所","LU2210149790.SGD":"Natixis Thematics Subscription Economy R/A SGD-H","BK4585":"ETF&股票定投概念","QID":"纳指两倍做空ETF","QLD":"纳指两倍做多ETF","LU2210150020.SGD":"Natixis Thematics Subscription Economy R/A SGD","PSQ":"纳指反向ETF","BK4588":"碎股","BK4141":"半导体产品","QQQ":"纳指100ETF","LU2095319765.USD":"Natixis Thematics Subscription Economy R/A USD","RMBS":"Rambus","SQQQ":"纳指三倍做空ETF",".IXIC":"NASDAQ Composite","BK4112":"金融交易所和数据"},"translate_title":"下跌的股票和坚实的基本面：市场对Rambus Inc。（纳斯达克：RMBS）的看法是错误的吗？","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"RMBS":1,"NDAQ":1,".IXIC":1,"TQQQ":0.6,"SQQQ":0.6,"QQQ":0.6,"QLD":0.6,"QID":0.6,"PSQ":0.6,"NQmain":0.6,"MNQmain":0.6},"content_text":"With its stock down 7.8% over the past month, it is easy to disregard Rambus (NASDAQ:RMBS). But if you pay close attention, you might gather that its strong financials could mean that the stock could potentially see an increase in value in the long-term, given how markets usually reward companies with good financial health. Specifically, we decided to study Rambus'  ROE in this article. \n Return on equity or ROE is an important factor to be considered by a shareholder because it tells them how effectively their capital is being reinvested. Simply put, it is used to assess the profitability of a company in relation to its equity capital. \n See our latest analysis for Rambus \n How Is ROE Calculated? \n ROE can be calculated by using the formula: \n Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity \nSo, based on the above formula, the ROE for Rambus is:\n32% = US$334m ÷ US$1.0b (Based on the trailing twelve months to December 2023).\n The 'return' is the income the business earned over the last year. That means that for every $1 worth of shareholders' equity, the company generated $0.32 in profit. \n What Is The Relationship Between ROE And Earnings Growth? \n We have already established that ROE serves as an efficient profit-generating gauge for a company's future earnings. We now need to evaluate how much profit the company reinvests or \"retains\" for future growth which then gives us an idea about the growth potential of the company. Assuming all else is equal, companies that have both a higher return on equity and higher profit retention are usually the ones that have a higher growth rate when compared to companies that don't have the same features. \n Rambus' Earnings Growth And 32% ROE \n First thing first, we like that Rambus has an impressive ROE. Additionally, the company's ROE is higher compared to the industry average of 14% which is quite remarkable. As a result, Rambus' exceptional 79% net income growth seen over the past five years, doesn't come as a surprise. \n We then compared Rambus' net income growth with the industry and we're pleased to see that the company's growth figure is higher when compared with the industry which has a growth rate of 29% in the same 5-year period. \n\n\n\n  NasdaqGS:RMBS Past Earnings Growth April 3rd 2024\n \n\n The basis for attaching value to a company is, to a great extent, tied to its earnings growth. The investor should try to establish if the expected growth or decline in earnings, whichever the case may be, is priced in. This then helps them determine if the stock is placed for a bright or bleak future. Is Rambus fairly valued compared to other companies? These 3 valuation measures might help you decide. \n Is Rambus Making Efficient Use Of Its Profits? \n Rambus doesn't pay any dividend to its shareholders, meaning that the company has been reinvesting all of its profits into the business. This is likely what's driving the high earnings growth number discussed above. \n Summary \n In total, we are pretty happy with Rambus' performance. In particular, it's great to see that the company is investing heavily into its business and along with a high rate of return, that has resulted in a sizeable growth in its earnings. That being so, according to the latest industry analyst forecasts, the company's earnings are expected to shrink in the future. To know more about the latest analysts predictions for the company, check out this visualization of analyst forecasts for the company. \nHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2424818489"}