Rambus Shares Pop on Sales, Outlook, Acquisition

Technology-licensing company Rambus Inc. (NASDAQ: RMBS) beat earnings and revenue estimates when it reported fourth-quarter results after markets closed on Monday. The icing on the cake was an improved outlook, and the cherry on top was an acquisition that seems to fit right into the company’s business.

Adjusted earnings per share rose to $0.18, excluding the impact of stock-based compensation, compared with the analysts’ consensus estimate of $0.08. Revenues rose 6.6% to $76.8 million compared with an estimate of $74 million. Revenues rose as a result of higher royalty payments from chipmaker SK Hynix and IBM, and a license renewal with Toshiba.

For 2016, Rambus forecast revenue in a range of $310 to $325 million, well above the analysts’ consensus of $294 million, and for the first quarter the company forecast revenue of $71 million to $75 million, compared with a consensus estimate of $73.03 million. Analysts expect earnings per share of $0.16 in the first quarter and $0.61 for the full year.

The acquisition of U.K.-based Smart Card Software for about $92 million adds a secure mobile-payment and ticketing platform to Rambus’s CryptoManager platform. The company expects the acquisition to contribute to pro forma earnings within the first 12 months after the deal closes.

In Tuesday’s noon hour, Rambus shares traded up almost 8% to $12.08, in a 52-week range of $9.86 to $15.49. The consensus price target on the stock is $13.33.

Sponsored: Tips for Investing

A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.