Rambus (NASDAQ: RMBS) and Smart Global Holdings (NYSE:SGH) are both small-cap computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitabiliy, valuation, risk, dividends, institutional ownership, analyst recommendations and earnings.

Insider & Institutional Ownership

80.1% of Rambus shares are owned by institutional investors. 2.0% of Rambus shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Rambus and Smart Global Holdings’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Rambus $379.48 million 3.67 $104.20 million $0.06 212.70
Smart Global Holdings $684.47 million 0.58 $71.24 million N/A N/A

Rambus has higher revenue, but lower earnings than Smart Global Holdings.

Profitability

This table compares Rambus and Smart Global Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rambus 1.76% 9.28% 6.57%
Smart Global Holdings 3.84% 132.75% 6.97%

Analyst Ratings

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rambus 0 1 4 0 2.80
Smart Global Holdings 0 0 5 1 3.17

Rambus presently has a consensus target price of $15.13, suggesting a potential upside of 18.53%. Smart Global Holdings has a consensus target price of $21.83, suggesting a potential upside of 18.53%. Given Rambus’ higher possible upside, equities analysts clearly believe Rambus is more favorable than Smart Global Holdings.

Summary

Smart Global Holdings beats Rambus on 8 of the 13 factors compared between the two stocks.

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.

Smart Global Holdings Company Profile

Smart Global Holdings Inc. is a holding company. The Company through its subsidiaries provides specialty memory solutions. The Company manufactures memory for desktops, notebooks, servers and mobile memory for smartphones. The Company also serves original equipment manufacturer (OEM), customers to develop memory solutions. The Company also provides customized, integrated supply chain services to certain OEM customers to assist them in the management and execution of their procurement processes. The Company offers its products and services under a range of categories including dynamic random-access memory (DRAM) components, DRAM modules, flash components, mobile memory and supply chain services. The Company offers a range of DRAM modules including DIMMs, nonvolatile DIMMs, load reducing DIMMs, registered DIMMs, unbuffered DIMMs, small outline DIMMs, and mini-DIMMs.

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