Financial Analysis: Rambus (NASDAQ:RMBS) and Valens Semiconductor (NYSE:VLN)

Valens Semiconductor (NYSE:VLN) and Rambus (NASDAQ:RMBS) are both computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, risk, profitability, earnings, institutional ownership, valuation and dividends.

Profitability

This table compares Valens Semiconductor and Rambus’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Valens Semiconductor	-44.38%	-23.12%	-18.88%
Rambus	33.72%	17.73%	15.20%

Volatility & Risk

Valens Semiconductor has a beta of 0.25, meaning that its stock price is 75% less volatile than the S&P 500. Comparatively, Rambus has a beta of 1.47, meaning that its stock price is 47% more volatile than the S&P 500.

Insider and Institutional Ownership

33.9% of Valens Semiconductor shares are held by institutional investors. Comparatively, 88.5% of Rambus shares are held by institutional investors. 58.9% of Valens Semiconductor shares are held by company insiders. Comparatively, 1.0% of Rambus shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Valens Semiconductor and Rambus”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Valens Semiconductor	$57.86 million	2.68	-$36.58 million	($0.29)	-5.22
Rambus	$678.49 million	14.58	$179.82 million	$2.11	43.55

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

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Valens Semiconductor and Rambus, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Valens Semiconductor	1	0	1	1	2.67
Rambus	0	1	6	3	3.20

Valens Semiconductor currently has a consensus price target of $3.00, suggesting a potential upside of 98.02%. Rambus has a consensus price target of $108.14, suggesting a potential upside of 17.68%. Given Valens Semiconductor’s higher probable upside, research analysts plainly believe Valens Semiconductor is more favorable than Rambus.

Summary

Rambus beats Valens Semiconductor on 13 of the 15 factors compared between the two stocks.

About Valens Semiconductor

Valens Semiconductor Ltd. engages in the provision of semiconductor products for the audio-video and automotive industries. The company offers HDBaseT technology, which enables the simultaneous delivery of ultra-high-definition digital video and audio, Ethernet, USB, control signals, and power through a single long-reach cable. It also provides audio-video solutions for the enterprise, education, industrial, digital signage, industrial, and medical markets. In addition, it offers automotive chipsets that support advanced driver-assistance systems, automotive data solutions, infotainment, telematics, and backbone connectivity. The company’s product series include VS100, VS2000, VS3000, VS6000, VS7000, Valens USB and power extender, Valens VS6320, USB 3.2 Gen1 extension chipset, VA6000, and VA7000. It has a collaboration with iCatch Technology to develop a 360-degree multi-camera videoconferencing solution. The company operates in Israel, China, Hong Kong, the United States, Japan, Germany, Hungary, and internationally. Valens Semiconductor Ltd. is headquartered in Hod Hasharon, Israel.

About Rambus

Rambus Inc. provides semiconductor products in the United States, South Korea, Singapore, and internationally. The company offers DDR memory interface chips, including DDR5 and DDR4 memory interface chips to module manufacturers, OEMs, and hyperscalers; silicon IP, such as interface and security IP solutions that move and protect data in advanced data center, government, and automotive applications; and interface IP solutions for high-speed memory and chip-to-chip digital controller IP. It also provides a portfolios of security IP solutions, including crypto cores, hardware roots of trust, high-speed protocol engines, and chip provisioning technologies; and portfolio of patents that covers memory architecture, high-speed serial links, and security products. It markets its products and services through its direct sales force and distributors. Rambus Inc. was incorporated in 1990 and is headquartered in San Jose, California.