Is Rambus, Inc. overvalued or undervalued?

As of 14 November 2025, the valuation grade for Rambus, Inc. moved from very attractive to attractive, indicating a shift in perception. The company appears to be overvalued based on its current metrics, particularly with a P/E ratio of 30, which is significantly higher than peers like Skyworks Solutions, Inc. at 20.61 and Qorvo, Inc. at 36.95. Additionally, Rambus has an EV to EBITDA ratio of 22.82, which is higher than the industry average, suggesting that the stock may be priced too high relative to its earnings potential.
In comparison to its peers, Rambus's valuation ratios indicate a premium, especially when looking at the EV to EBIT ratio of 26.78. The company's strong ROCE of 32.46% and ROE of 17.53% reflect solid operational performance, but the elevated valuation ratios suggest that investors may be overestimating future growth. Notably, while Rambus has delivered impressive returns over the past five years at 508.82%, it has underperformed the S&P 500 over the same period, which returned 232.87%. This discrepancy reinforces the notion that Rambus may be overvalued in the current market context.