Head-To-Head Review: CMC Materials (NASDAQ:CCMP) versus Rambus (NASDAQ:RMBS)

CMC Materials (NASDAQ:CCMPGet Rating) and Rambus (NASDAQ:RMBSGet Rating) are both mid-cap computer and technology companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, risk, earnings, profitability, dividends, valuation and analyst recommendations.

Volatility & Risk

CMC Materials has a beta of 1.14, indicating that its stock price is 14% more volatile than the S&P 500. Comparatively, Rambus has a beta of 1.16, indicating that its stock price is 16% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for CMC Materials and Rambus, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CMC Materials 0 5 2 0 2.29
Rambus 0 1 5 0 2.83

CMC Materials currently has a consensus target price of $197.25, suggesting a potential upside of 13.67%. Rambus has a consensus target price of $31.33, suggesting a potential upside of 49.14%. Given Rambus’ stronger consensus rating and higher possible upside, analysts plainly believe Rambus is more favorable than CMC Materials.

Earnings and Valuation

This table compares CMC Materials and Rambus’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
CMC Materials $1.20 billion 4.14 -$68.58 million $3.82 45.43
Rambus $328.30 million 7.05 $18.33 million ($0.42) -50.02

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

Institutional & Insider Ownership

93.7% of CMC Materials shares are held by institutional investors. Comparatively, 87.0% of Rambus shares are held by institutional investors. 2.4% of CMC Materials shares are held by company insiders. Comparatively, 1.5% of Rambus shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares CMC Materials and Rambus’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CMC Materials 8.85% 23.55% 9.97%
Rambus -12.68% 17.27% 12.39%

About CMC Materials (Get Rating)

CMC Materials, Inc., together with its subsidiaries, provides consumable materials to semiconductor manufacturers, and pipeline and adjacent industry customers in North America, Asia, Europe, the Middle East, Africa, and South America. The company operates in two segments, Electronic Materials and Performance Materials. The Electronic Materials segment develops, produces, and sells chemical mechanical planarization (CMP) slurries for polishing various materials used in IC devices, including tungsten, dielectric materials, copper, tantalum, and aluminum; and various materials that are used in the production of disk substrates and magnetic heads for hard disk drives; and CMP pads, which are used in conjunction with slurries in the CMP process. This segment also offers sulfuric, phosphoric, nitric, and hydrofluoric acids, as well as ammonium hydroxide, hydrogen peroxide, isopropyl alcohol, other specialty organic solvents, and various blends of chemicals; and develops and manufactures consumable products for cleaning advanced probe cards and test sockets. The Performance Materials segment provides pipeline and industrial materials comprising polymer-based drag-reducing agents for crude oil transmission, valve greases, cleaners and sealants, and related services and equipment; and routine and emergency maintenance services, as well as training services. This segment also offers precision polishing and metrology systems for advanced optics applications; and magneto-rheological polishing fluids, consumables, and spare and replacement parts, as well as optical polishing services and other customer support services; and engages in the wood treatment business. The company was formerly known as Cabot Microelectronics Corporation and changed its name to CMC Materials, Inc. in October 2020. CMC Materials, Inc. was incorporated in 1999 and is headquartered in Aurora, Illinois.

About Rambus (Get Rating)

Rambus Inc. provides semiconductor products in the United States, Taiwan, South Korea, Japan, Europe, Canada, Singapore, China, and internationally. The company offers DDR memory interface chips, including DDR5, DDR4 and DDR3 memory interface chips to module manufacturers and OEMs; silicon IP comprising, interface and security IP solutions that move and protect data in advanced applications; and physical interface and digital controller IP to offer industry-leading, integrated memory and interconnect subsystems. It also provides a portfolio of patents that covers memory architecture, high-speed serial links, and security products. The company 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.

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