Rambus Inc. (NASDAQ:RMBS) shares are down during premarket trading on Tuesday following the company’s fourth-quarter financial results.
The stock’s decline comes as the company achieved record revenue and earnings, which have not been enough to buoy investor sentiment in a mixed market environment.
Earnings
Rambus reported record revenue of $190.2 million for the fourth quarter of 2025, surpassing expectations, with product revenue of $96.8 million, up 41% year over year.
Additionally, the company generated $99.8 million in cash from operating activities during the quarter, bringing annual cash flow to $360 million.
Rambus reported an adjusted EPS of 68 cents for the fourth quarter of 2025, in line with expectations.
Luc Seraphin, the CEO of Rambus, commented, “2025 was a record-breaking year for Rambus, delivering strong growth in revenue and earnings, and new quarterly and annual highs for product revenue and cash from operations. Our sustained leadership in DDR5 RCDs and growing contributions from new products drove substantial year-over-year product growth. With a robust roadmap and deep expertise aligned to the secular trends transforming data center and AI, we are well positioned to meet industry needs and drive long-term profitable growth.”
Outlook
For the first quarter of 2026, Rambus expects licensing billings between $66 million and $72 million, royalty revenue between $61 million and $67 million, product revenue between $84 million and $90 million, and contract and other revenue between $21 million and $27 million.
In total, Rambus expects first quarter 2026 revenue of $171 million to $189 million versus the analyst consensus of $189.30 million.
The company anticipates operating costs and expenses of $117 million to $121 million, with non-GAAP operating costs of $100 million to $104 million, assuming a 16% tax rate and a diluted share count of 110 million.
RMBS Faces Short-Term Weakness Despite Yearly Gains
The stock is currently trading 6.5% above its 20-day simple moving average (SMA) but is slightly above its 50-day and 100-day SMAs, indicating some short-term weakness while maintaining longer-term strength. Shares have increased by 88.42% over the past 12 months and are currently closer to their 52-week highs than their lows.
The RSI is at 56.04, which is considered neutral territory, while the MACD is above its signal line, indicating bullish momentum. The combination of a neutral RSI and a bullish MACD suggests mixed momentum, suggesting traders should watch for potential price movements.
- Key Resistance: $102.50
- Key Support: $89.50
Analyst Consensus & Recent Actions
The stock carries a Buy Rating with an average price target of $82.91. Recent analyst moves include:
- William Blair: Initiated with Outperform (Jan. 22)
- Wells Fargo: Overweight (Raises Target to $115.00) (Oct. 28, 2025)
- Rosenblatt: Buy (Maintains Target to $130.00) (Oct. 28, 2025)
Valuation Insight: While the stock trades at a premium P/E multiple, the strong consensus and 8% expected earnings decline suggest analysts view this growth as justification for the current valuation.
Rambus Scores High on Benzinga Edge Rankings
Below is the Benzinga Edge scorecard for Rambus, highlighting its strengths and weaknesses compared to the broader market:
– Value: Weak (Score: 11.4) — Trading at a steep premium relative to peers.
– Growth: Strong (Score: 74.28) — Indicating solid growth potential.
– Momentum: Bullish (Score: 92.34) — Stock is outperforming the broader market.
The Verdict: Rambus’s Benzinga Edge signal reveals a strong growth potential with solid momentum, but the weak value score suggests that investors should be cautious about the stock’s premium valuation. While the momentum score indicates positive price action, the overall valuation context may warrant careful consideration.
RMBS Price Action: Rambus shares were down 11.60% at $100.52 during premarket trading on Tuesday, according to Benzinga Pro data.
Photo via Shutterstock
Recent Comments