Head to Head Survey: Rambus (NASDAQ:RMBS) & Ultra Clean (NASDAQ:UCTT)

Rambus (NASDAQ:RMBS) and Ultra Clean (NASDAQ:UCTT) are both small-cap computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, profitability, analyst recommendations, dividends, risk, valuation and institutional ownership.

Valuation & Earnings

This table compares Rambus and Ultra Clean’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Rambus $224.03 million 7.41 -$90.42 million ($0.30) -48.83
Ultra Clean $1.07 billion 0.89 -$9.40 million $0.91 26.01

Ultra Clean has higher revenue and earnings than Rambus. Rambus is trading at a lower price-to-earnings ratio than Ultra Clean, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Rambus has a beta of 0.98, indicating that its share price is 2% less volatile than the S&P 500. Comparatively, Ultra Clean has a beta of 1.69, indicating that its share price is 69% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations for Rambus and Ultra Clean, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rambus 0 1 4 0 2.80
Ultra Clean 0 3 2 0 2.40

Rambus presently has a consensus price target of $17.06, suggesting a potential upside of 16.45%. Ultra Clean has a consensus price target of $26.00, suggesting a potential upside of 9.84%. Given Rambus’ stronger consensus rating and higher possible upside, research analysts plainly believe Rambus is more favorable than Ultra Clean.

Profitability

This table compares Rambus and Ultra Clean’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rambus -29.97% -2.53% -1.86%
Ultra Clean -0.05% 10.68% 4.76%

Insider and Institutional Ownership

81.6% of Rambus shares are held by institutional investors. Comparatively, 87.4% of Ultra Clean shares are held by institutional investors. 1.1% of Rambus shares are held by insiders. Comparatively, 1.8% of Ultra Clean shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Ultra Clean beats Rambus on 9 of the 14 factors compared between the two stocks.

Rambus Company Profile

Rambus Inc. provides semiconductor products in the United States, Japan, Europe, Taiwan, China, South Korea, Canada, Singapore, Asia, and internationally. The company operates through three divisions: Memory and Interfaces, Rambus Security, and Emerging Solutions. The Memory and Interfaces division engages in the design, development, and manufacturing through partnerships and licensing of technology and solutions related to memory and interfaces. It offers standards-compatible memory and SerDes solutions, including server DIMM memory interface chips, architectures, and IP cores for high-speed memory and SerDes interfaces. The Rambus Security division is involved in the design, development, deployment, and licensing of technologies for chip, system and in-field application security, anti-counterfeiting, smart ticketing, and mobile payments. It provides a suite of products and services from DPA countermeasures and cores to CryptoManager platform, mobile payments, and smart ticketing. The Emerging Solutions division engages in the research and development in the area of emerging technologies. The company also offers technology licenses to support the implementation and adoption of technology in their products or services; and a range of services, which include know-how and technology transfer, product design and development, system integration, and other services. Rambus Inc. was founded in 1990 and is headquartered in Sunnyvale, California.

Ultra Clean Company Profile

Ultra Clean Holdings, Inc. designs, develops, prototypes, engineers, manufactures, and tests production tools, modules, and subsystems for the semiconductor and display capital equipment industries primarily in North America, Asia, and Europe. It offers precision robotic systems that are used when accurate controlled motion is required; gas delivery systems, which include one or more gas lines consisting of small diameter internally polished stainless steel tubing products, filters, mass flow controllers, regulators, pressure transducers and valves, component heaters, and an integrated electronic and/or pneumatic control system; and various industrial and automation production equipment products. The company also provides subsystems, such as wafer cleaning modules; chemical delivery modules that deliver gases and reactive chemicals in a liquid or gaseous form from a centralized subsystem to the reaction chamber; frame assemblies, which are support structures fabricated from steel tubing or folded sheet metal; and top-plate assemblies. In addition, it offers fluid delivery systems consists of one or more chemical delivery units; process modules, which are the subsystems of semiconductor manufacturing tools that process integrated circuits onto wafers; and other high level assemblies. The company primarily serves original equipment manufacturing customers in the semiconductor capital equipment, consumer, medical, energy, industrial, and research industries. Ultra Clean Holding, Inc. was founded in 1991 and is headquartered in Hayward, California.

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