Financial Analysis: Smart Global Holdings (NYSE:SGH) vs. Rambus (RMBS)
Smart Global Holdings (NYSE: SGH) and Rambus (NASDAQ:RMBS) are both small-cap technology companies, but which is the better investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, valuation, risk, profitability, earnings and analyst recommendations.
This table compares Smart Global Holdings and Rambus’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Smart Global Holdings||3.84%||132.75%||6.97%|
Institutional and Insider Ownership
80.1% of Rambus shares are owned by institutional investors. 2.0% of Rambus shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
This is a breakdown of current ratings for Smart Global Holdings and Rambus, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Smart Global Holdings||0||0||5||1||3.17|
Smart Global Holdings currently has a consensus target price of $21.83, indicating a potential upside of 19.11%. Rambus has a consensus target price of $15.13, indicating a potential upside of 19.75%. Given Rambus’ higher probable upside, analysts plainly believe Rambus is more favorable than Smart Global Holdings.
Earnings & Valuation
This table compares Smart Global Holdings and Rambus’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Smart Global Holdings||$684.47 million||0.58||$71.24 million||N/A||N/A|
|Rambus||$379.48 million||3.64||$104.20 million||$0.06||210.54|
Rambus has higher revenue, but lower earnings than Smart Global Holdings.
Smart Global Holdings beats Rambus on 8 of the 13 factors compared between the two stocks.
About Smart Global Holdings
Smart Global Holdings Inc. is a holding company. The Company through its subsidiaries provides specialty memory solutions. The Company manufactures memory for desktops, notebooks, servers and mobile memory for smartphones. The Company also serves original equipment manufacturer (OEM), customers to develop memory solutions. The Company also provides customized, integrated supply chain services to certain OEM customers to assist them in the management and execution of their procurement processes. The Company offers its products and services under a range of categories including dynamic random-access memory (DRAM) components, DRAM modules, flash components, mobile memory and supply chain services. The Company offers a range of DRAM modules including DIMMs, nonvolatile DIMMs, load reducing DIMMs, registered DIMMs, unbuffered DIMMs, small outline DIMMs, and mini-DIMMs.
Rambus Inc. (Rambus) produces hardware and software technologies. The Company’s segments include Memory and Interface Division (MID), which focuses the design, development, manufacturing through partnerships and licensing of technology and solutions that is related to memory and interfaces; Rambus Security Division (RSD), which focuses on the design, development and licensing of technologies for chip and system security, anti-counterfeiting, smart ticketing and mobile payments; Emerging Solutions Division (ESD), which encompasses its long-term research and development efforts in the area of emerging technologies, and Rambus Lighting Division (RLD), which focuses on the design, development and licensing of technologies for lighting. The Company collaborates with application-specific integrated circuit (ASIC) and System-on-Chip (SoC) designers, foundries, Internet protocol (IP) developers, processor companies, electronic design automation (EDA) companies and validation laboratories.
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