2023-05-18 08:30:31 ET
Rambus ( NASDAQ: RMBS ) shares rose nearly 4% in pre-market trading on Thursday as Jefferies upgraded the semiconductor company on "increased confidence" it will gain share in buffer chips.
Analyst Mark Lipacis raised his rating on Rambus ( RMBS ) shares to buy from hold and boosted the per-share price target to $65 from $45, noting that not only will it gain share when it launches DDR5, but it could see "significant adjacent growth opportunities" for companion chips and compute express link.
"We estimate 2026 EPS power of $3.30+ underpinned by nearly 30% [compound annual growth rate in product revenues] over the next 4 years and steady high FCF-earning IP segments," Lipacis wrote in an investor note.
In addition, Lipacis said that Rambus ( RMBS ) is in a "strong position" to boost its share in the registering clock drivers market while also seeing its total addressable market double from adjacent opportunities by 2024, compared to 2021.
"As qualification cycles for [registering clock drivers] chips are long and complex due to interoperability requirements with other chip vendors, [registering clock drivers] market share tends to be sticky beyond initial shipments," Lipacis wrote, adding that in previous generations, the companies that were first to market had at least 50% of the market.
Lipacis expects Rambus ( RMBS ) to at least double its market share to 50% in registering clock drivers, up from roughly 25% in 2022.
Analysts are largely bullish on Rambus ( RMBS ). It has a BUY rating from Seeking Alpha authors , while Wall Street analysts rate it a STRONG BUY . Conversely, Seeking Alpha's quant system, which consistently beats the market, rates RMBS a HOLD .
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Rambus rises as Jefferies upgrades on 'increased confidence' to gain share