Reviewing Rambus (RMBS) and First Solar (FSLR)

First Solar (NASDAQ: FSLR) and Rambus (NASDAQ:RMBS) are both oils/energy companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, valuation, analyst recommendations, dividends, earnings and profitability.

Volatility & Risk

First Solar has a beta of 1.84, suggesting that its stock price is 84% more volatile than the S&P 500. Comparatively, Rambus has a beta of 0.44, suggesting that its stock price is 56% less volatile than the S&P 500.

Profitability

This table compares First Solar and Rambus’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
First Solar -3.51% 6.26% 4.81%
Rambus -17.65% 8.46% 5.94%

Institutional and Insider Ownership

54.4% of First Solar shares are held by institutional investors. Comparatively, 81.0% of Rambus shares are held by institutional investors. 0.5% of First Solar shares are held by insiders. Comparatively, 3.2% of Rambus shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and recommmendations for First Solar and Rambus, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Solar 1 5 13 0 2.63
Rambus 0 2 4 0 2.67

First Solar currently has a consensus price target of $74.75, indicating a potential upside of 6.44%. Rambus has a consensus price target of $16.48, indicating a potential upside of 23.10%. Given Rambus’ stronger consensus rating and higher possible upside, analysts plainly believe Rambus is more favorable than First Solar.

Earnings & Valuation

This table compares First Solar and Rambus’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Solar $2.94 billion 2.50 -$165.61 million $2.59 27.12
Rambus $393.10 million 3.66 -$22.86 million $0.45 29.76

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

Summary

Rambus beats First Solar on 9 of the 14 factors compared between the two stocks.

About First Solar

First Solar, Inc. provides photovoltaic solar energy solutions in the United States and internationally. It operates through two segments, Components and Systems. The Components segment designs, manufactures, and sells cadmium telluride solar modules that convert sunlight into electricity. This segment offers its products to integrators and operators. The Systems segment provides turn-key photovoltaic solar power systems or solar solutions, such as project development; engineering, procurement, and construction; and operating and maintenance services to utilities, independent power producers, commercial and industrial companies, and other system owners. The company was formerly known as First Solar Holdings, Inc. and changed its name to First Solar, Inc. in 2006. First Solar, Inc. was founded in 1999 and is headquartered in Tempe, Arizona.

About Rambus

Rambus Inc. provides semiconductor products in South Korea and internationally. The company operates through Memory and Interfaces, Security, and Other segments. It focuses on the design, development, and manufacturing through partnerships and licensing of technology and solutions related to memory and interfaces; and design, development, deployment, and licensing of technologies for chip, system and in-field application security, anti-counterfeiting, smart ticketing, and mobile payments. The company also focuses on the research and development in the area of emerging technologies; and design, development, and licensing of technologies for advanced LED-based lighting solutions, as well as providing a range of services, including know-how and technology transfer, product design and development, system integration, and other services. Its products are integrated into a range of devices and systems, powering, and securing diverse applications, including big data, Internet of things security, mobile, mobile payments, and smart ticketing. Rambus Inc. was founded in 1990 and is headquartered in Sunnyvale, California.

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