Head to Head Contrast: Rambus (RMBS) and Adesto Technologies Corporation (IOTS)

Adesto Technologies Corporation (NASDAQ: IOTS) and Rambus (NASDAQ:RMBS) are both small-cap computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, valuation, dividends, profitability, risk, analyst recommendations and institutional ownership.

Valuation & Earnings

This table compares Adesto Technologies Corporation and Rambus’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Adesto Technologies Corporation $48.23 million 2.79 -$6.67 million ($0.67) -9.70
Rambus $379.48 million 3.63 $104.20 million $0.06 210.37

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

Profitability

This table compares Adesto Technologies Corporation and Rambus’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Adesto Technologies Corporation -21.41% -35.81% -14.35%
Rambus 1.76% 9.28% 6.57%

Risk and Volatility

Adesto Technologies Corporation has a beta of 2.36, meaning that its stock price is 136% more volatile than the S&P 500. Comparatively, Rambus has a beta of 0.9, meaning that its stock price is 10% less volatile than the S&P 500.

Institutional and Insider Ownership

15.6% of Adesto Technologies Corporation shares are held by institutional investors. Comparatively, 80.0% of Rambus shares are held by institutional investors. 22.1% of Adesto Technologies Corporation shares are held by company insiders. Comparatively, 2.0% of Rambus shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and target prices for Adesto Technologies Corporation and Rambus, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Adesto Technologies Corporation 0 0 2 1 3.33
Rambus 0 1 4 0 2.80

Adesto Technologies Corporation currently has a consensus price target of $7.00, indicating a potential upside of 7.69%. Rambus has a consensus price target of $15.13, indicating a potential upside of 19.85%. Given Rambus’ higher possible upside, analysts plainly believe Rambus is more favorable than Adesto Technologies Corporation.

Summary

Rambus beats Adesto Technologies Corporation on 10 of the 14 factors compared between the two stocks.

Adesto Technologies Corporation Company Profile

Adesto Technologies Corporation is a provider of application-specific and ultra-low power non-volatile memory products. The Company optimizes its non-volatile memory products for Internet of Things (IoT), applications, including current and next-generation Internet-connected devices in the consumer, industrial, medical and wearables markets. It operates in application-specific and feature-rich, ultra-low power non-volatile memory (NVM) products segment. It combines its non-volatile memory design capabilities with intellectual property and differentiated technology platforms to deliver products that manage the overall energy consumption of its customers’ systems and battery life. Its products feature embedded intelligence in a small form factor. It sells its products directly to original equipment manufacturers and original design manufacturers, respectively that manufacture products for its end customers.

Rambus Company Profile

Rambus Inc. (Rambus) produces hardware and software technologies. The Company’s segments include Memory and Interface Division (MID), which focuses the design, development, manufacturing through partnerships and licensing of technology and solutions that is related to memory and interfaces; Rambus Security Division (RSD), which focuses on the design, development and licensing of technologies for chip and system security, anti-counterfeiting, smart ticketing and mobile payments; Emerging Solutions Division (ESD), which encompasses its long-term research and development efforts in the area of emerging technologies, and Rambus Lighting Division (RLD), which focuses on the design, development and licensing of technologies for lighting. The Company collaborates with application-specific integrated circuit (ASIC) and System-on-Chip (SoC) designers, foundries, Internet protocol (IP) developers, processor companies, electronic design automation (EDA) companies and validation laboratories.

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