Benzinga | Oct 14, 2021 09:42AM EDT

This Analyst Sees 61% Upside In Rambus As It's Well Positioned To Benefit From DRAM Demand

* Rosenblatt analyst Kevin Cassidy initiated coverage of Rambus Inc (NASDAQ:RMBS) with a Buy rating and $35 price target, implying a 60.55% upside.

* Cassidy believes Rambus is well-positioned to benefit from the increasing demand for high-performance DRAM in data systems, particularly artificial intelligence applications.

* The company's long-term IP Licensing contracts generate predictable and significant cash from operations, Cassidy says.

* Cassidy finds the current valuation trading well below its peer group.

* Separately the semiconductor solutions provider announced the exit of CFO Rahul Mathur on November 15 to pursue another opportunity. However, Rambus affirmed its Q3 FY21 outlook.

* Rambus sees Q3 licensing billings of $59 million - $65 million. Rambus sees royalty revenue of $25 million - $31 million, product revenue of $34 million - $40 million, and contract and other revenue of $11 million - $17 million.

* Price Action: RMBS shares traded higher by 3.05% at $22.47 in the market session on the last check Thursday.