Rambus, Inc.RMBS is slated to release its fourth-quarter 2017 results on Jan 29. The question lingering on investors' minds is whether this semiconductor and IP product provider will be able to post a positive earnings surprise this time around.
Notably, Rambus has surpassed the Zacks Consensus Estimate in three of the trailing four quarters with an average positive earnings surprise of 8.2%.
What Our Model Says
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP . The Sell-rated stocks (Zacks Rank #4 or 5) are best avoided. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .
Rambus has a Zacks Rank #3 and its Earnings ESP is 0.00%. Therefore, the company is unlikely to deliver a positive surprise this quarter.
What to Expect?
For the quarter under review, the Zacks Consensus Estimate for revenues and earnings are pegged at $101.2 million and 19 cents, respectively.
The top-line figure is expected to witness year-over-year growth of 3.7% while the bottom line is projected to increase 18.8% from the year-ago quarter.
Factors to Consider
The soon-to-be reported quarter has been quite an eventful one for Rambus. In October 2017, the company announced a host of "silicon-proven PHYs on 14nm LPP process technology". The company also announced the interoperability of "Rambus DDR4 3200 PHY and Arm CoreLink Dynamic Memory Controller" meant for datacenters. Rambus undertook initiatives for mobile payments via integration with its Token Service Provider (TSP) technology. The continuous launch of products is likely to boost Rambus' fourth-quarter revenues.
Rambus, Inc. Price and EPS Surprise
Furthermore, partnerships continue to be one of the key growth catalysts for the company. In the last few months, Rambus has entered into several collaborations. In Canada, the company partnered with Interac and Samsung Canada for enabling "Interac Debit on Samsung Pay". In Australia, the company teamed up with eftpos to support Android Pay and Apple Pay.
Additionally, the company's CryptoManager IoT Security Service was adopted by Cybertrust Japan for its Cybertrust Secure IoT Platform. In December 2017, the company's Binary Pixel technology and related patents were licensed by Gigajot Technology for its image capture technologies. Furthermore, Panasonic Corporation renewed its license agreement with Rambus in December.
These deals will enhance its product offerings and boost the company's top and bottom-line performance in the to-be-reported quarter, in our view.
Some Stocks With a Favorable Combination
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Facebook, Inc. FB has an Earnings ESP of +2.04% and a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here.
Apple Inc. AAPL has an Earnings ESP of +0.77% and a Zacks Rank #3.
Microsoft Corp. MSFT has an Earnings ESP of +0.39% and a Zacks Rank #3.
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