Rambus' Strategic Resource Redirection To Drive Performance Despite Minor Revenue Impact: Analyst
Portfolio Pulse from Nabaparna Bhattacharya
Susquehanna analyst Mehdi Hosseini has reiterated a positive rating on Rambus, Inc. (NASDAQ:RMBS), raising the price target to $75 from $60. This follows Rambus' sale of their SerDes and Memory Interface PHY IP business to Cadence Design Systems, Inc. (NASDAQ:CDNS). The sale is viewed as positive for Rambus' operating margin due to the high operating expenses associated with the PHY business. The business represents less than 5% of Rambus' total revenue and is expected to be immaterial to revenue for CY23.
July 21, 2023 | 6:38 pm
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POSITIVE IMPACT
Rambus' sale of their PHY IP business to Cadence Design Systems is expected to improve the company's operating margin. The business represents less than 5% of Rambus' total revenue and is expected to be immaterial to revenue for CY23.
The sale of the PHY IP business, which has high operating expenses, is expected to improve Rambus' operating margin. This, coupled with the raised price target by Susquehanna analyst, could positively impact the company's stock price in the short term.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
NEUTRAL IMPACT
Cadence Design Systems has acquired the SerDes and Memory Interface PHY IP business from Rambus. The impact of this acquisition on Cadence's operations and financials is not clear from the news.
While Cadence Design Systems has acquired the PHY IP business from Rambus, the news does not provide sufficient information to determine the potential impact of this acquisition on Cadence's operations and financials.
CONFIDENCE 70
IMPORTANCE 50
RELEVANCE 50