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Rambus RMBS shares soared 8.2% in the last trading session to close at $21.94. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 10.1% gain over the past four weeks.
The upswing came after Rambus announced initiating an accelerated share repurchase (ASR) program and two acquisitions.
Continuing with its efforts to enhance shareholder value, the semiconductor products provider announced yesterday that it will buy back $100 million worth of the company’s common stocks under an ASR program. This initiative reflects the California-based company’s sound financial position and favorable prospects.
Additionally, in separate press releases, Rambus announced that it has signed agreements to acquire AnalogX and PLDA for an undisclosed amount. While AnalogX provides low power multi-standard connectivity SerDes IP solutions, PLDA is an industry leader in Compute Express Link and PCI Express digital solutions.
The company expects to complete both the acquisitions in the third quarter of calendar 2021. Moreover, it anticipates the transactions to be accretive in 2022.
This memory chip designer is expected to post quarterly earnings of $0.31 per share in its upcoming report, which represents a year-over-year change of +875%. Revenues are expected to be $107.02 million, up 3.3% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For Rambus, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on RMBS going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
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Rambus, Inc. (RMBS) : Free Stock Analysis Report
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