Contrasting Rambus (NASDAQ:RMBS) & Tower Semiconductor (NASDAQ:TSEM)

Rambus (NASDAQ:RMBS) and Tower Semiconductor (NASDAQ:TSEM) are both computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, dividends, earnings, risk and institutional ownership.

Earnings and Valuation

This table compares Rambus and Tower Semiconductor’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rambus	$461.12 million	10.64	$333.90 million	$3.27	13.93
Tower Semiconductor	$1.42 billion	N/A	$518.49 million	$4.41	9.15

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

Analyst Recommendations

This is a breakdown of current ratings for Rambus and Tower Semiconductor, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rambus	0	0	4	0	3.00
Tower Semiconductor	0	0	3	0	3.00

Rambus presently has a consensus price target of $77.75, indicating a potential upside of 70.69%. Tower Semiconductor has a consensus price target of $46.33, indicating a potential upside of 14.83%. Given Rambus’ higher probable upside, equities research analysts plainly believe Rambus is more favorable than Tower Semiconductor.

Risk & Volatility

Rambus has a beta of 1.2, meaning that its stock price is 20% more volatile than the S&P 500. Comparatively, Tower Semiconductor has a beta of 0.9, meaning that its stock price is 10% less volatile than the S&P 500.

Profitability

This table compares Rambus and Tower Semiconductor’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Rambus	48.31%	16.74%	13.70%
Tower Semiconductor	35.58%	8.33%	6.95%

Institutional and Insider Ownership

88.5% of Rambus shares are owned by institutional investors. Comparatively, 70.5% of Tower Semiconductor shares are owned by institutional investors. 1.0% of Rambus shares are owned by company insiders. Comparatively, 1.0% of Tower Semiconductor shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

Rambus beats Tower Semiconductor on 8 of the 11 factors compared between the two stocks.

About Rambus

Rambus Inc. provides semiconductor products in the United States, South Korea, Singapore, and internationally. The company offers DDR memory interface chips, including DDR5 and DDR4 memory interface chips to module manufacturers, OEMs, and hyperscalers; silicon IP, such as interface and security IP solutions that move and protect data in advanced data center, government, and automotive applications; and interface IP solutions for high-speed memory and chip-to-chip digital controller IP. It also provides a portfolios of security IP solutions, including crypto cores, hardware roots of trust, high-speed protocol engines, and chip provisioning technologies; and portfolio of patents that covers memory architecture, high-speed serial links, and security products. It markets its products and services through its direct sales force and distributors. Rambus Inc. was incorporated in 1990 and is headquartered in San Jose, California.

About Tower Semiconductor

Tower Semiconductor Ltd., an independent semiconductor foundry, focus on specialty process technologies to manufacture analog intensive mixed-signal semiconductor devices in Israel, the United States, Japan, Europe, and internationally. It provides various customizable process technologies, including SiGe, BiCMOS, mixed signal/CMOS, RF CMOS, CMOS image sensor, integrated power management, and MEMS. The Company also provides design enablement platform for quick and accurate design cycle, as well as transfer optimization and development process services to integrated device manufacturers and fabless companies. It serves various markets, such as consumer electronics, personal computers, communications, automotive, industrial, aerospace, military, and medical device products. The company was incorporated in 1993 and is headquartered in Migdal Haemek, Israel.