Why Rambus Stock Sank Today
Key Points
Rambus posted a sales beat in Q3, thanks to strong momentum in the DDR5 category.
Earnings for the period were in line with expectations, but that wasn't enough to stop the stock from slipping.
Investors are concerned about decelerating growth.
- 10 stocks we like better than Rambus ›
Rambus (NASDAQ: RMBS) stock lost ground in Tuesday's trading on the heels of a mostly solid quarterly report. The company's share price fell 8.7% in a daily session that saw the S&P 500 (SNPINDEX: ^GSPC) rise 0.2% and the Nasdaq Composite (NASDAQINDEX: ^IXIC) jump 0.8%.
Rambus published its third-quarter results after the market closed yesterday, posting earnings that were in line with Wall Street's target and sales that beat expectations. Despite the sales beat, some investors appear to have been hoping for stronger earnings and forward guidance.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »
Image source: Getty Images.
Rambus stock sinks despite better-than-expected revenue
Rambus recorded non-GAAP (generally accepted accounting principles) adjusted earnings per share (EPS) of $0.63 on revenue of $178.5 million. While the company's adjusted profit was in line with the average analyst estimate, sales for the period came in ahead of Wall Street's call for sales of $176 million.
Using Rambus' adjusted revenue figure of $179.5 million, the performance beat for the period looked even stronger. Revenue was up approximately 22% year over year, thanks to strong momentum in the DDR5 memory solutions category, but it wasn't enough to impress investors.
What's next for Rambus?
Rambus is guiding for fourth-quarter sales to come in between $184 million and $190 million and adjusted operating costs between $99 million and $103 million. Adjusted EPS for Q4 is projected to be between $0.64 and $0.71.
While the company's business has historically been subject to cyclical trends, investors aren't thrilled with the potential for growth deceleration in the current quarter. That doesn't necessarily mean that the business won't deliver strong performance over the long term, but the stock has still nearly doubled this year even after today's pullback -- and expectations have been raised.
Should you invest $1,000 in Rambus right now?
Before you buy stock in Rambus, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Rambus wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $590,287!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,173,807!*
Now, it’s worth noting Stock Advisor’s total average return is 1,047% — a market-crushing outperformance compared to 195% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.
See the 10 stocks »
*Stock Advisor returns as of October 27, 2025
Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Recommended Articles
