Monolithic Power Systems (NASDAQ:MPWR) and Rambus (NASDAQ:RMBS) Financial Survey

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

Earnings & Valuation

This table compares Monolithic Power Systems and Rambus’ revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Monolithic Power Systems	$1.82 billion	17.47	$427.37 million	$8.76	74.61
Rambus	$461.12 million	13.43	$333.90 million	$3.00	19.01

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

Volatility & Risk

Monolithic Power Systems has a beta of 1.24, indicating that its share price is 24% more volatile than the S&P 500. Comparatively, Rambus has a beta of 1.16, indicating that its share price is 16% more volatile than the S&P 500.

Insider & Institutional Ownership

93.5% of Monolithic Power Systems shares are held by institutional investors. Comparatively, 88.5% of Rambus shares are held by institutional investors. 3.2% of Monolithic Power Systems shares are held by company insiders. Comparatively, 1.0% of Rambus shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Monolithic Power Systems and Rambus’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Monolithic Power Systems	23.47%	22.66%	18.72%
Rambus	72.41%	17.70%	14.46%

Analyst Recommendations

This is a summary of current ratings and target prices for Monolithic Power Systems and Rambus, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Monolithic Power Systems	0	1	8	0	2.89
Rambus	0	0	4	0	3.00

Monolithic Power Systems currently has a consensus price target of $670.30, indicating a potential upside of 3.11%. Rambus has a consensus price target of $77.75, indicating a potential upside of 35.95%. Given Rambus’ stronger consensus rating and higher probable upside, analysts clearly believe Rambus is more favorable than Monolithic Power Systems.

Summary

Monolithic Power Systems beats Rambus on 11 of the 14 factors compared between the two stocks.

About Monolithic Power Systems

Monolithic Power Systems, Inc. engages in the design, development, marketing, and sale of semiconductor-based power electronics solutions for the storage and computing, automotive, enterprise data, consumer, communications, and industrial markets. The company provides direct current (DC) to DC integrated circuits (ICs) that are used to convert and control voltages of various electronic systems, such as cloud-based CPU servers, server artificial intelligence applications, storage applications, commercial notebooks, digital cockpit, power sources, home appliances, 4G and 5G infrastructure, and satellite communications applications. It offers lighting control ICs for backlighting that are used in systems, which provide the light source for LCD panels in computers and notebooks, monitors, car navigation systems, and televisions, as well as for general illumination products. The company sells its products through third-party distributors, value-added resellers, directly to original equipment manufacturers, original design manufacturers, electronic manufacturing service providers, and other end customers. It serves China, Taiwan, South Korea, Europe, Japan, Southeast Asia, the United States, and internationally. Monolithic Power Systems, Inc. was incorporated in 1997 and is headquartered in Kirkland, Washington.

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.