Analyzing Nova (NASDAQ:NVMI) & Rambus (NASDAQ:RMBS)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Rambus	31.69%	17.89%	16.21%
Nova	28.84%	21.41%	11.95%

Volatility & Risk

Rambus has a beta of 1.88, indicating that its share price is 88% more volatile than the S&P 500. Comparatively, Nova has a beta of 1.76, indicating that its share price is 76% more volatile than the S&P 500.

Valuation and Earnings

This table compares Rambus and Nova”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rambus	$707.63 million	13.16	$230.46 million	$2.18	39.39
Nova	$880.58 million	12.56	$259.22 million	$8.08	43.08

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

Insider & Institutional Ownership

88.5% of Rambus shares are owned by institutional investors. Comparatively, 83.0% of Nova shares are owned by institutional investors. 0.7% of Rambus shares are owned by company insiders. Comparatively, 1.0% of Nova shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Rambus and Nova, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rambus	0	4	6	0	2.60
Nova	0	2	8	1	2.91

Rambus presently has a consensus price target of $145.88, indicating a potential upside of 69.88%. Nova has a consensus price target of $514.44, indicating a potential upside of 47.80%. Given Rambus’ higher possible upside, research analysts plainly believe Rambus is more favorable than Nova.

Summary

Nova beats Rambus on 9 of the 15 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 Nova

Nova Ltd. designs, develops, produces, and sells process control systems used in the manufacture of semiconductors in Israel, Taiwan, the United States, China, Korea, and internationally. Its product portfolio includes a set of metrology platforms for dimensional, films, and materials and chemical metrology measurements for process control for various semiconductor manufacturing process steps, including lithography, etch, chemical mechanical planarization, deposition, electrochemical plating, and advanced packaging. The company serves various sectors of the integrated circuit manufacturing industry, including logic, foundries, and memory manufacturers, as well as process equipment manufacturers. Nova Ltd. was formerly known as Nova Measuring Instruments Ltd. and changed its name to Nova Ltd. in July 2021. Nova Ltd. was incorporated in 1993 and is headquartered in Rehovot, Israel.