Comparing Rambus (NASDAQ:RMBS) and Cohu (NASDAQ:COHU)

Cohu (NASDAQ:COHU) and Rambus (NASDAQ:RMBS) are both technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, profitability, dividends, risk, valuation, analyst recommendations and institutional ownership.

Valuation and Earnings

This table compares Cohu and Rambus”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cohu	$522.60 million	6.07	-$74.27 million	($0.83)	-80.72
Rambus	$756.33 million	15.08	$230.46 million	$2.18	48.24

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

Risk & Volatility

Cohu has a beta of 1.58, indicating that its share price is 58% more volatile than the S&P 500. Comparatively, Rambus has a beta of 1.88, indicating that its share price is 88% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and price targets for Cohu and Rambus, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cohu	1	1	7	1	2.80
Rambus	0	4	6	0	2.60

Cohu presently has a consensus target price of $68.75, suggesting a potential upside of 2.61%. Rambus has a consensus target price of $145.88, suggesting a potential upside of 38.72%. Given Rambus’ higher possible upside, analysts clearly believe Rambus is more favorable than Cohu.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Cohu	-7.43%	-1.96%	-1.30%
Rambus	31.69%	17.89%	16.21%

Insider and Institutional Ownership

94.7% of Cohu shares are held by institutional investors. Comparatively, 88.5% of Rambus shares are held by institutional investors. 3.0% of Cohu shares are held by company insiders. Comparatively, 0.7% of Rambus shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Rambus beats Cohu on 10 of the 15 factors compared between the two stocks.

About Cohu

Cohu, Inc., through its subsidiaries, provides semiconductor test equipment and services in China, the United States, Taiwan, Malaysia, the Philippines, and internationally. The company supplies semiconductor test and inspection handlers, micro-electromechanical system (MEMS) test modules, test contactors, thermal sub-systems, and semiconductor automated test equipment for semiconductor manufacturers and test subcontractors. It also provides semiconductor automated test equipment for wafer level and device package testing; various test handlers, including pick-and-place, turret, gravity, strip, and MEMS and thermal sub-systems; interface products comprising test contactors, and probe heads and pins; spares and kits; various parts and labor warranties on test and handling systems, and instruments; and training on the maintenance and operation of its systems, as well as application, data management software, and consulting services on its products. In addition, the company offers data analytics product that includes DI-Core, a software suite used to optimize Cohu equipment performance, which provides real-time online performance monitoring and process control. It markets its products through direct sales force and independent sales representatives. The company was formerly known as Cohu Electronics, Inc. and changed its name to Cohu, Inc. in 1972. The company was incorporated in 1947 and is headquartered in Poway, California.

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.