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Technology Stocks : Rambus (RMBS) - Eagle or Penguin -- Ignore unavailable to you. Want to Upgrade?

To: Mkilloran who wrote (17799)	3/25/1999 10:24:00 AM
From: MileHigh	Respond to of 93625

I flipped it @ $66.5, made my few pennies.....here's a report from H&Q ** Hambrecht & Quist Hambrecht & Quist Hambrecht & Quist Company: Rambus Incorporated Price: 62 Recommendation: BUY Notes: a, b,f Firm: Hambrecht & Quist Department: Technology Industry: Semiconductors Date: 3/25/99 Q1 Q2 Q3 Q4 FY 1998 A 0.06 0.07 0.07 0.07 0.28 1999 E 0.08 0.08 0.08 0.09 0.33 2000 E 0.15 0.24 0.31 0.40 1.11 52-Week Range 36-110 Market Cap 1,544 Shares Out 24.9 Book Value $1.88 Net Cash/Share $2.03 3-Year EPS Growth _____ CY98 P/E-to-Growth _____ FY Revs 37.9 CY EPS 0.30 CY P/E 206 The Message from Micron: PC133 Would be Nice Synopsis - On their quarterly conference call yesterday, Micron expressed their interest in selling PC133 SDRAM as an interim solution before RDRAM becomes available in volume. Micron would like to see Intel offer a Katmai processor and chipset solution that would make PC133 SDRAM a performance booster. Micron, already a producer of PC133 as a high-performance offshoot of their PC100 business, has an interest in a PC133 market developing, and is clearly a strong PC133 supporter. We maintain our BUY on Rambus despite Micron's somewhat bearish outlook on RDRAM adoption. Micron would like to sell PC133. On their quarterly conference call yesterday, Micron expressed their interest in selling PC133 SDRAM as an interim solution before RDRAM becomes available in volume. Micron would like to see Intel offer a Katmai processor and chipset solution that would make PC133 SDRAM a performance booster and thus a pricing booster for Micron's DRAM business. Micron, already a producer of PC133 as a high-performance offshoot of their PC100 business, sees only upside in a PC133 market developing, and is clearly a strong PC133 supporter. We stress that PC133 requires no incremental investment for Micron, and they would see significant pricing upside if they were able to sell PC133 performance parts as PC133 parts rather than PC100 parts. PC133 requires a complete solution.Micron was clear that for a PC133 SDRAM business to be a success there would be a need for both a PC133 chipset solution and a 133 MHz front-side bus on the Intel Katmai. Currently, the 133 MHz front-side bus is not expected until later this year, coincident with the Camino chipset and RDRAM rollout expected in late September. A change in Intel PC133 policy would likely be good for Micron but bad for Rambus. If Intel were to announce an earlier release of a Katmai with a 133 MHz front-side bus and a PC133 chipset, this would be a net negative for Rambus in the short-term. If this were to happen, it would also likely be a net positive for Micron's pricing and a nice short-term boost to their business. So, on this issue, Micron and Rambus interests are not aligned. Continued bearish sentiment on Rambus. Despite accepting a $500 million investment from Intel for the Rambus rollout, Micron continues to express a more bearish outlook on RDRAM adoption compared to Intel. They see volume adoption in CY2000, and seem less confident concerning significant RDRAM volume in late CY1999. Recommendation. We maintain our BUY rating on shares of Rambus, despite the somewhat bearish outlook on the rollout from Micron and ongoing concerns over PC133. We believe most of these concerns have been baked into the current Rambus share price, but note there might be some pressure on the stock on the wake of the Micron call. We believe there is some modest risk to our CY1999 Rambus estimates, but are not basing our BUY recommendation on the short-term earnings story. We believe the outlook for the company is still very positive and essentially unchanged for 2000 and 2001, despite the turbulence surrounding a difficult architectural transition. Rambus Inc. designs, develops, licenses, and markets high-speed chip-to-chip interface technology to enhance the performance and cost-effectiveness of consumer electronics, computer systems and other electronic systems. The company's technology cost-effectively increases the data transfer rate, or "memory bandwidth", allowing semiconductor memory devices to keep pace with faster generations of processors and controllers and thus support the accelerating data transfer requirements of multimedia and other high bandwidth applications. The company licenses semiconductor interface technology and markets its solutions to systems vendors to encourage them to design Rambus interface technology into their products. 1999 Copyright Hambrecht & Quist LLC. All rights reserved. The information contained herein is based on sources believed to be reliable but is neither all-inclusive nor guaranteed by our firm. Opinions reflect our judgment at this time and are subject to change. We do not undertake to advise you of changes in our opinion or information. In the course of our regular business, we may be long or short in the securities mentioned and may make purchases and/or sales of them from time to time in the open market, as a market maker, or otherwise. In addition, we may perform or seek to perform investment banking services for the issuers of these securities. Most of the companies we follow are emerging and mid-size growth companies whose securities typically involve a higher degree of risk and more volatility than the securities of more established companies. For these and other reasons, the investments discussed or recommended in this report may be unsuitable for investors depending on their specific investment objectives and financial position. This report is not a recommendation or a solicitation that any particular investor should purchase or sell any particular security in any amount, or at all. SPOT REPORTS: H&Q publishes brief Spot Reports covering very recent or developing events or situations regarding companies or industries covered. These reports are made available to interested clients of H&Q on a request basis. They often contain only partial information in very brief, often in outline form; their purpose is to provide rapid information and preliminary evaluations of such events or situations which may very rapidly be changed as a result of subsequent additional information and analysis. Note Legend: (a) Hambrecht & Quist LLC maintains a market in these stocks. (b) Hambrecht & Quist LLC has been an underwriting manager, or co-manager, or has privately placed securities of these companies within the last three years. (c) Hambrecht & Quist LLC has an investment position in these companies. (d) A Hambrecht & Quist LLC employee is a director of these firms. (e) The analysts covering these stocks have investment positions. (f) Options are available on these issues. (g) Entities associated with Hambrecht & Quist LLC have an aggregate beneficial ownership of more than 5% of the outstanding equity securities of these companies. (h) Hambrecht & Quist LLC acts as a financial advisor to this company. (r) Restricted. No recommendation at this time. May, but does not necessarily, designate a company in registration.