eastunder Sunday, 10/05/14 01:47:09 PM Re: None 0 Post # of 17010 Zacks' Bull Of The Day: Rambus Oct. 3, 2014 2:14 PM ET http://seekingalpha.com/article/2539275-zacks-bull-of-the-day-rambus Headquartered in Sunnyvale, CA, Rambus (NASDAQ:RMBS) is a technology solutions company, focusing on the semiconductor industry. It was founded in 1990 and had its IPO in May 1997. They have regional offices in France, India, Japan, Korea and Taiwan. The company designs, develops, licenses and markets technology solutions for memory systems for smartphones and tablets and advanced security solutions for cloud computing and mobile devices. According to the company, they are “futuristic technologists who bring invention to market from architectural licensing, to the creation of products and services”. Diversified Portfolio with Leadership in Memory Solutions While historically the company focused on technologies for electronic memories and chip interfaces, they have been expanding in new areas including chip and system security and LED based lighting. Since 1994. Rambus has maintained substantial lead in introducing innovative solutions in memory technology. The company’s Memory and Interface Division (MID) designs memory and serial link interfaces, primarily for mobile servers, and accounts for about 70% of the revenue. Cryptography Research (CRI), which accounts for about 20% of revenues, delivers DPA countermeasures, content protection, anti-counterfeiting and key management technologies for mainly for smart cards and smart phones/tablets. Excellent Second Quarter Results Rambus reported its Q2 2014 results on July 21. Revenue for the quarter was $76.5 million, which was at the high end of their upwardly revised guidance of $75 million to $77 million, and was up 32% year-over-year. Pro forma net income for the quarter was $18.9 million also above their guidance. Net income per share was $0.13, significantly ahead of the Zacks Consensus Estimate of $0.05 per share. The management provided their guidance for the third quarter with the results; they now expect revenue to be between $68 million and $73 million and pro forma net income to be between $12 million and $18 million. They however maintained their guidance for FY 2014 provided earlier this year. Guidance was slightly lower compared to street estimates and thus the stock did slide after the results. Rising Earnings Estimates After solid results, analysts have increased their estimates for the company. Zacks Consensus Estimates for FY 2014 and 2015 are now $0.21 per share and $0.34 per share respectively, up from $0.20 per share and $0.30 per share, 30 days ago. As can be seen from the following “Price & EPS Surprise” chart, Rambus has delivered positive surprises consistently in last nine quarters. Looks Poised to Beat Earnings Consensus in Q3 With an ESP (Expected Surprise Prediction) of 20.0%, Rambus looks well positioned to deliver a positive earnings surprise for the third quarter. Zacks Earnings ESP is a proprietary tool that helps investors find expected earnings surprises by focusing on the most recent analyst revisions. Long-Term Growth Drivers Rambus management sees significant growth opportunities in both mobile and server verticals. In the new era of “The Internet of Things (IoT)”, enormous amount of data will be generated and carried across the networks and will lead to substantial growth opportunities for companies that can provide services and solutions for capturing, securing and moving this data. Rambus look well positioned to capitalize on this trend with its innovative solutions for connected clients, cloud datacenters and networks. Rambus expects to growth its revenue by 12-18% per year in the longer-term. Licensing agreements continue to be stable and recurring revenue source for Rambus as it continues to monetize its patents. The Bottom-Line Memory industry continues to be attractive with memory and links being the key enablers for mobile and cloud systems. Rambus’ memory business looks well positioned to provide growing cash flows going forward. Further, with increasing security breaches at all levels, security is becoming an increasing concern, which will help the company expand its technology and products portfolio and provide more effective data security solutions. "Then there was a woman, a lion of a woman."