Rambus, Inc. (NASDAQ:RMBS) Sees Large Increase in Short Interest

Key Points

• Short interest surged: Short interest rose 12.9% in April to 6,763,258 shares (about 6.3% of float), with a days-to-cover of roughly 3.4 based on average daily volume.
• Earnings beat and strong margins: Rambus topped Q1 estimates with EPS of $0.63 vs. $0.61 and revenue of $180.19M, posting a 31.9% net margin, and analysts expect about 2.44 EPS for the year.
• Insider selling amid bullish analyst views: Insiders sold roughly 61,123 shares (~$6.3M) in the last 90 days while institutional ownership stands at 88.54%, and analysts hold a "Moderate Buy" consensus with an average target of $130.43 (highs up to $172).

Rambus, Inc. (NASDAQ:RMBS - Get Free Report) was the recipient of a large growth in short interest in the month of April. As of April 15th, there was short interest totaling 6,763,258 shares, a growth of 12.9% from the March 31st total of 5,990,703 shares. Approximately 6.3% of the company's shares are sold short. Based on an average daily trading volume, of 1,976,043 shares, the days-to-cover ratio is presently 3.4 days.

Rambus Stock Performance

NASDAQ:RMBS opened at $115.11 on Friday. The stock has a 50-day simple moving average of $103.04 and a 200-day simple moving average of $101.58. The stock has a market cap of $12.45 billion, a P/E ratio of 54.81 and a beta of 1.63. Rambus has a 1 year low of $48.80 and a 1 year high of $161.80.

Rambus (NASDAQ:RMBS - Get Free Report) last released its quarterly earnings data on Monday, April 27th. The semiconductor company reported $0.63 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.61 by $0.02. The business had revenue of $180.19 million during the quarter, compared to analysts' expectations of $179.94 million. Rambus had a return on equity of 17.41% and a net margin of 31.90%. On average, equities research analysts predict that Rambus will post 2.44 EPS for the current year.

Insider Activity at Rambus

In related news, Director Meera Rao sold 2,972 shares of the business's stock in a transaction on Friday, April 24th. The stock was sold at an average price of $150.30, for a total transaction of $446,691.60. Following the completion of the transaction, the director directly owned 19,974 shares of the company's stock, valued at $3,002,092.20. The trade was a 12.95% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available through this hyperlink. Also, CEO Luc Seraphin sold 5,426 shares of the business's stock in a transaction on Thursday, April 2nd. The stock was sold at an average price of $86.65, for a total value of $470,162.90. Following the transaction, the chief executive officer directly owned 345,767 shares of the company's stock, valued at $29,960,710.55. The trade was a 1.55% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last 90 days, insiders have sold 61,123 shares of company stock worth $6,295,577. 0.75% of the stock is currently owned by company insiders.

Institutional Inflows and Outflows

Several institutional investors and hedge funds have recently made changes to their positions in RMBS. Hussman Strategic Advisors Inc. acquired a new stake in shares of Rambus in the 3rd quarter valued at about $1,094,000. Nordea Investment Management AB boosted its position in shares of Rambus by 101.7% in the 3rd quarter. Nordea Investment Management AB now owns 139,430 shares of the semiconductor company's stock valued at $14,669,000 after purchasing an additional 70,314 shares during the period. Baader Bank Aktiengesellschaft acquired a new stake in shares of Rambus in the 3rd quarter valued at about $1,149,000. M&T Bank Corp boosted its position in shares of Rambus by 2,372.0% in the 4th quarter. M&T Bank Corp now owns 122,636 shares of the semiconductor company's stock valued at $11,269,000 after purchasing an additional 117,675 shares during the period. Finally, Universal Beteiligungs und Servicegesellschaft mbH boosted its position in shares of Rambus by 57.0% in the 3rd quarter. Universal Beteiligungs und Servicegesellschaft mbH now owns 52,435 shares of the semiconductor company's stock valued at $5,464,000 after purchasing an additional 19,046 shares during the period. 88.54% of the stock is owned by institutional investors and hedge funds.

Analysts Set New Price Targets

Several research firms recently commented on RMBS. Wells Fargo & Company boosted their target price on Rambus from $115.00 to $145.00 and gave the stock an "overweight" rating in a research note on Tuesday. Evercore reissued an "outperform" rating and set a $172.00 target price on shares of Rambus in a research note on Tuesday. Zacks Research raised Rambus to a "hold" rating in a research note on Monday, January 26th. Rosenblatt Securities boosted their target price on Rambus from $130.00 to $150.00 and gave the stock a "buy" rating in a research note on Tuesday. Finally, Susquehanna lowered their target price on Rambus from $100.00 to $90.00 and set a "neutral" rating for the company in a research note on Tuesday, February 3rd. One analyst has rated the stock with a Strong Buy rating, five have assigned a Buy rating and four have issued a Hold rating to the company's stock. According to MarketBeat, the stock currently has a consensus rating of "Moderate Buy" and an average price target of $130.43.

Rambus Company Profile

Rambus Inc is a technology licensing company specializing in semiconductor and system-level interface solutions. Founded in 1990 by Stanford University researchers Mike Farmwald and Mark Horowitz, Rambus established its headquarters in Sunnyvale, California. The company initially gained prominence by developing high-speed DRAM interface technology and securing a broad patent portfolio covering memory architecture, data signaling and power management innovations.

Today, Rambus licenses its proprietary intellectual property (IP) to semiconductor companies, original equipment manufacturers (OEMs) and system integrators worldwide.

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