Rambus has strong fundamentals (low debt, steady growth) but weak returns on capital and high valuation limit its upside compared to peers.

Third, the memory [snorts] plumbing. Rambus, ticker RMBBS. A powerful AI chip is useless if it's stuck waiting for data to arrive. Rambus designs the specialized plumbing that moves data between the chip and its memory incredibly fast.

As AI gets hungrier, that data traffic jam gets worse. And Rambus helps solve it. So, what's the risk? This technology changes constantly. Miss the next big design and you can lose out.

And finally, Rambus, our memory company. A totally different piece of the puzzle. It's smaller, but growing quite nicely with revenue up 20% to a record.

Now, guys, it's a smaller company, but it's still growing nice and steady. And a lot of people love its business model. It makes money two different ways, selling actual chips and collecting royalties on its designs like a toll booth that gets paid over and over again.

Its product sales grew even faster, up 22%. And it just launched its fastest ever memory chip built for AI servers. The catch, it lives or dies by winning each new generation of technology.

So, let's see what the numbers say. So, guys, it's a $9.7 billion company. Look at this. A lower enterprise value. That means they have more cash on hand than debt. That's what I love about this kind of business that even if the business doesn't do as well, they're not going to have mountains of debt that they can't overcome as long as they manage their cash well.

One year free cash flow, $300 million. 5year free cash flow 230. So, we're not seeing quite the big explosion like the other companies had, but we are seeing returns on capital getting better. 8.6% a year for the last five, 13.5% last year.

And look at this revenue growth, guys. A lot more consistent. 9.7% a year for the last 10, 22% for the last five, 17.3% a year for the last 3 years.

And look at these margins. This is what kind of confuses me. 13% for the last 10, 31% for the last one and five years. Now, the good news is very little in acquisitions, only seven million over the last 5 years, and still saw 22.5% revenue growth.

Let's check out their eight pillars. All right, expensive PE, expensive price of free cash flow, and that low return on capital for the last five years. So, other than that, look at this debt.

02% 2. I mean, it's nothing. I as long as they can keep this going, keep that debt low, and stay a cash positive business, it is very hard that even if there's a pullback in AI, that they won't be around still. That's what I like about this.

Let's see what analysts think. Not as sexy. $3 a share going to 480 basically all of it in the next two years. So, still 60% growth over the next three years. And then revenue growing from 830 million to 1.3 billion.

So guys, this one's selling for a premium, but it doesn't have the same growth story potential that the other companies have. So let's pull in our stock analyzer tool. Let's do the 10-year assumption again.

Let's do four, 9, and 14%. Revenue growth. Now profit margin. What I like here is their 10-year profit margin is a lot lower than their free cash flow. So free cash flow is higher.

So, we're going to focus on the free cash flow 29, 32, and 35. And their free cash flow, we're going to go with 36, no, 37, 40, and 43%.

Next, what PE and price of free cash flow? Well, here's my concern, guys. Look at their five and 10 year returns on capital. Not very good. So, it needs a lower multiple. I'm going to sit here and show 13, 16, and 19.

Yes, it's in this awesome space of AI, but it seems like it's going to be a hit or miss thing and these returns on capital are kind of poopy. So, I look at it going, well, even if it does well, it's still not getting good returns on the money invest in the business.

That's not a good thing for investors. In fact, 13, 16, 19 might actually be too high.

Guys, I have a low price of 30 to 38, high price of 95 to 115, and a middle price of 53 to 66. So, it's not far off from the current price, but again, this is a company that has to be you have to be right on AI in order for this thing to make a lot of sense.