SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : Rambus (RMBS) - Eagle or Penguin
RMBS 107.76+1.2%Nov 7 9:30 AM EST
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Ian@SI who wrote ()9/3/1999 5:02:00 AM
From: FLSTF97  Read Replies (3) of 93625
 
Can somebody help me understand their revenue streams?

As I understand it RMBS averages optimistically 2% royalty. Are they prebooking royalties or do they have a stiff initial fee? Please correct my following logic if it is wrong:

1999 estimated DRAM business= $20 billion.
Potential total Market (revenue for RMBS)= $400 million
Current/est 99 revenues $40Million

Does anybody really believe that RMBS constitutes 10% of the market today?

And going forward to 2003 (I'll use DQ numbers and take no position in their validity)

DRAM optimistic Market $50 Billion but project at $35 Billion.

I've seen market projections for Rambus ranging from 9% to 40% of the total in 2003.

That means for 9% share Rev = $90 Million @ $50 bil and 63 mil for the $35 bil number

At 40% penetration we see $400 and $280 respectively.

That means that today RMBS is valued at the following vs revenues 3 years out.

$50B/40% 5x rev
$50B/9% 24x rev
$35B/40% 7.6 x rev
$35B/9% 33 x rev.

Unless you believe the most optimistic projections, it would seem to me that this stock is fully valued against revenues going forward. I realize that their revenue stream is likely to produce very high margins since it is royalty based. Has anyone attempted a projection versus the expected growth of earnings (I assume they should grow at a much faster rate than revenues since much of their cost is already sunk)?
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News