Contrasting GCT Semiconductor (NYSE:GCTS) and Rambus (NASDAQ:RMBS)

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

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Rambus and GCT Semiconductor, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rambus	0	3	5	2	2.90
GCT Semiconductor	2	0	2	0	2.00

Rambus presently has a consensus target price of $105.71, suggesting a potential upside of 17.81%. GCT Semiconductor has a consensus target price of $3.50, suggesting a potential upside of 213.90%. Given GCT Semiconductor’s higher possible upside, analysts clearly believe GCT Semiconductor is more favorable than Rambus.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rambus	$707.63 million	13.72	$230.46 million	$2.11	42.53
GCT Semiconductor	$2.87 million	28.15	-$12.38 million	($0.81)	-1.38

Rambus has higher revenue and earnings than GCT Semiconductor. GCT Semiconductor 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 Rambus and GCT Semiconductor’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Rambus	32.57%	17.69%	15.42%
GCT Semiconductor	-1,513.33%	N/A	-231.27%

Volatility & Risk

Rambus has a beta of 1.55, indicating that its share price is 55% more volatile than the S&P 500. Comparatively, GCT Semiconductor has a beta of 1.23, indicating that its share price is 23% more volatile than the S&P 500.

Insider & Institutional Ownership

88.5% of Rambus shares are held by institutional investors. Comparatively, 28.1% of GCT Semiconductor shares are held by institutional investors. 0.8% of Rambus shares are held by insiders. Comparatively, 5.4% of GCT Semiconductor shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Rambus beats GCT Semiconductor on 12 of the 15 factors compared between the two stocks.

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.

About GCT Semiconductor

GCT Semiconductor Holding, Inc., operates as a fabless semiconductor company, designs, develops, and markets integrated circuits for the wireless semiconductor industry. The company provides RF and modem chipsets based on 4G LTE technology, including 4G LTE, 4.5G LTE Advanced, and 4.75G LTE Advanced-Pro. It also develops and sells cellular IoT chipsets for low-speed mobile networks such as eMTC/NB-IOT/Sigfox, and other network protocols; and 5G solutions. Its products and solutions are used in smartphones, tablets, hotspots, CPEs, USB dongles, routers, and M2M applications. The company sells its products directly or indirectly through distributors to original equipment manufacturers and original design manufacturers primarily in Taiwan, China, Korea and Japan, Europe, North America and South America. The company was formerly known as Global Communication Technology, Inc. GCT Semiconductor Holding, Inc. was founded in 1998 and is headquartered in San Jose, California.