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

Analyst Recommendations

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rambus 0 2 2 0 2.50
Smart Global 0 0 6 1 3.14

Rambus currently has a consensus price target of $15.98, indicating a potential upside of 8.90%. Smart Global has a consensus price target of $36.36, indicating a potential upside of 27.57%. Given Smart Global’s stronger consensus rating and higher possible upside, analysts clearly believe Smart Global is more favorable than Rambus.

Valuation & Earnings

This table compares Rambus and Smart Global’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Rambus $336.60 million 4.78 $6.81 million $0.09 163.00
Smart Global $132.88 million 4.65 -$7.79 million ($0.53) -53.77

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

Institutional and Insider Ownership

77.0% of Rambus shares are owned by institutional investors. Comparatively, 92.2% of Smart Global shares are owned by institutional investors. 2.0% of Rambus shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Rambus 2.54% 9.79% 7.00%
Smart Global N/A N/A N/A

Summary

Rambus beats Smart Global 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 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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