Contrasting Rambus (NASDAQ:RMBS) & Sequans Communications (NYSE:SQNS)

Sequans Communications (NYSE:SQNS) and Rambus (NASDAQ:RMBS) are both computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, risk, profitability, institutional ownership, dividends, earnings and analyst recommendations.

Analyst Recommendations

This is a summary of current ratings for Sequans Communications and Rambus, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sequans Communications	0	0	1	0	3.00
Rambus	0	0	4	0	3.00

Sequans Communications currently has a consensus target price of $3.00, indicating a potential upside of 170.27%. Rambus has a consensus target price of $77.75, indicating a potential upside of 84.59%. Given Sequans Communications’ higher probable upside, equities research analysts clearly believe Sequans Communications is more favorable than Rambus.

Valuation and Earnings

This table compares Sequans Communications and Rambus”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sequans Communications	$33.62 million	2.05	-$40.99 million	($0.79)	-1.41
Rambus	$461.12 million	9.84	$333.90 million	$3.27	12.88

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

Profitability

This table compares Sequans Communications and Rambus’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sequans Communications	-140.08%	-1,229.91%	-38.35%
Rambus	48.31%	16.74%	13.70%

Insider and Institutional Ownership

63.3% of Sequans Communications shares are held by institutional investors. Comparatively, 88.5% of Rambus shares are held by institutional investors. 9.4% of Sequans Communications shares are held by insiders. Comparatively, 1.0% of Rambus shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Risk and Volatility

Sequans Communications has a beta of 0.24, meaning that its share price is 76% less volatile than the S&P 500. Comparatively, Rambus has a beta of 1.19, meaning that its share price is 19% more volatile than the S&P 500.

Summary

Rambus beats Sequans Communications on 11 of the 13 factors compared between the two stocks.

About Sequans Communications

Sequans Communications S.A. engages in the fabless designing, developing, and supplying of cellular semiconductor solutions for massive and broadband Internet of Things (IoT) markets in Taiwan, Korea, China, rest of Asia, Germany, the United States, and internationally. It offers baseband solutions for use in encoding and decoding data based on 4G and 5G protocols for wireless processing platform for a cellular device; RF transceivers used to transmit and receive wireless transmissions; highly integrated SoC solutions that combine various functions into a single die or package; and LTE modules. The company also provides software, including source code and tools to enable manufacturers to integrate their solutions into their devices; and design support services. The company serves OEMs and ODMs Customers, as well as 4G and 5G wireless carriers. Sequans Communications S.A. was incorporated in 2003 and is based in Paris, France.

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.