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Globalfoundries Inc. (GFS)
:GFS
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GlobalFoundries Inc
(NASDAQ:GFS)54Neutral
Positive Factors
Government Support
The capacity expansion by GFS is supported by the US and European CHIPS Act, providing significant funding opportunities.
Strategic Partnerships
GFS is expanding its presence in Europe by partnering with STMicroelectronics to build a new semiconductor manufacturing facility in France.
Negative Factors
Consumer Electronics Market Risk
GFS has a high revenue exposure to smart mobile devices, which poses a risk if the consumer electronics market continues to weaken.
GlobalFoundries Inc (GFS) vs. S&P 500 (SPY)
Market Cap
$21.33B
Dividend YieldN/A
Average Volume (3M)2.54M
Price to Earnings (P/E)28.2
Beta (1Y)1.85
Revenue Growth-8.69%
EPS Growth-125.98%
CountryUS
Employees12,000
SectorTechnology
Sector Strength48
IndustrySemiconductors and Equipment
Share Statistics
EPS (TTM)-0.48
Shares Outstanding555,505,250
10 Day Avg. Volume2,000,804
30 Day Avg. Volume2,536,925
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)2.87
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$49.11Price Target Upside22.77% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
GlobalFoundries Inc Business Overview & Revenue Model
Company DescriptionGlobalFoundries Inc. (GFS) is a leading semiconductor foundry that specializes in the design and manufacture of integrated circuits. With facilities across the globe, GlobalFoundries serves a diverse range of industries including automotive, mobile communications, consumer electronics, and data centers. The company provides innovative semiconductor solutions that enable its clients to create highly efficient and power-optimized products.
How the Company Makes MoneyGlobalFoundries Inc. generates revenue primarily through the fabrication and sale of semiconductor wafers. As a contract manufacturer, the company partners with various businesses to produce customized chips according to their specific designs and requirements. Revenue streams include long-term supply agreements with major technology companies, as well as collaborations with emerging tech firms seeking specialized foundry services. GlobalFoundries benefits from economies of scale by operating large-scale manufacturing facilities, which helps optimize production costs and improve profit margins. Additionally, the company invests in research and development to advance its technological capabilities, thus enhancing its competitive advantage and ability to attract high-profile clients.
GlobalFoundries Inc Financial Statement Overview
Summary
GlobalFoundries faces profitability and growth challenges, as reflected in the income statement. However, the company maintains a strong balance sheet and demonstrates excellent cash flow management, mitigating some risks. Continued focus on improving profitability and revenue growth will be essential for future stability and success.Income Statement
The income statement reflects a challenging period for GlobalFoundries. Gross profit margin has declined from 28.4% in 2023 to 24.4% in 2024, and the net profit margin has turned negative, moving from 13.8% in 2023 to -3.9% in 2024. Revenue growth has also been negative, declining by 8.7% from 2023 to 2024. Additionally, EBIT and EBITDA margins both deteriorated, with EBIT margin dropping from 15.3% to -3.2%, and EBITDA margin from 35.6% to 34.0% in 2024. The declining profitability and negative growth rates point to operational challenges.42
Neutral
Balance Sheet
The balance sheet shows a stable financial position with a debt-to-equity ratio of 0.21 in 2024, indicating conservative leverage. The return on equity (ROE) has weakened from 9.2% in 2023 to -2.5% in 2024, reflecting profitability issues. However, the equity ratio increased from 61.5% in 2023 to 64.1% in 2024, suggesting a solid equity base. Overall, the company maintains a strong balance sheet, but profitability concerns remain.65
Positive
Cash Flow
Cash flow analysis highlights strong cash management. Free cash flow increased significantly, from $321 million in 2023 to $1,097 million in 2024, showing a growth rate of 241.8%. The operating cash flow to net income ratio is high at -6.49, indicating robust cash generation relative to net income. Free cash flow to net income ratio is also strong at -4.14, emphasizing effective cash flow management despite profitability challenges.77
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 6.75B | 7.39B | 8.11B | 6.58B | 4.85B | Gross Profit |
| 1.65B | 2.10B | 2.24B | 1.01B | -712.72M | EBIT |
| -214.00M | 1.13B | 1.17B | -68.00M | -1.50B | EBITDA |
| 2.30B | 2.64B | 3.27B | 1.56B | 1.31B | Net Income Common Stockholders |
| -265.00M | 1.02B | 1.45B | -254.00M | -1.35B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 3.39B | 3.47B | 2.97B | 2.94B | 908.08M | Total Assets |
| 16.80B | 18.04B | 17.84B | 15.03B | 12.32B | Total Debt |
| 2.23B | 2.75B | 2.51B | 2.01B | 2.80B | Net Debt |
| 38.00M | 367.00M | 159.00M | -926.00M | 1.89B | Total Liabilities |
| 5.97B | 6.89B | 7.88B | 7.00B | 5.08B | Stockholders Equity |
| 10.78B | 11.10B | 9.91B | 8.03B | 7.18B |
| Cash Flow | Free Cash Flow | |||
| 1.10B | 321.00M | -435.00M | 1.07B | 413.41M | Operating Cash Flow |
| 1.72B | 2.13B | 2.62B | 2.84B | 1.01B | Investing Cash Flow |
| -1.13B | -1.88B | -4.06B | -1.45B | -366.17M | Financing Cash Flow |
| -785.00M | -212.00M | 842.00M | 650.00M | -732.74M |
GlobalFoundries Inc Technical Analysis
Negative
40.00
Price Trends
41.57
Negative
41.80
Negative
44.36
Negative
Market Momentum
-0.91
Positive
47.92
Neutral
35.86
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GFS, the sentiment is Negative. The current price of 40 is below the 20-day moving average (MA) of 40.78, below the 50-day MA of 41.57, and below the 200-day MA of 44.36, indicating a bearish trend. The MACD of -0.91 indicates Positive momentum. The RSI at 47.92 is Neutral, neither overbought nor oversold. The STOCH value of 35.86 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GFS.
GlobalFoundries Inc Risk Analysis
GlobalFoundries Inc disclosed 66 risk factors in its most recent earnings report. GlobalFoundries Inc reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
GlobalFoundries Inc Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $175.29B | 16.94 | 41.96% | 2.15% | 12.13% | 36.17% | |
75 Outperform | $2.70T | 37.63 | 119.18% | 0.03% | 114.20% | 146.26% | |
74 Outperform | $804.36B | 26.16 | 29.96% | 1.04% | 29.98% | 35.76% | |
73 Outperform | $164.75B | 98.53 | 2.89% | ― | 13.69% | 91.75% | |
59 Neutral | $22.39B | 11.53 | -18.05% | 2.31% | 5.00% | -25.89% | |
54 Neutral | $21.33B | 28.15 | -2.42% | ― | -8.69% | -125.98% | |
48 Neutral | $89.85B | ― | -18.31% | 2.41% | -2.08% | -1212.72% |
* Technology Sector Average
Performance Comparison
GFS
GlobalFoundries Inc
40.00
-13.46
-25.18%
AMD
Advanced Micro Devices
100.31
-98.08
-49.44%
INTC
Intel
20.64
-23.76
-53.51%
NVDA
Nvidia
112.69
26.94
31.42%
QCOM
Qualcomm
161.22
-6.54
-3.90%
TSM
TSMC
177.10
39.61
28.81%
GlobalFoundries Inc Earnings Call Summary
Earnings Call Date: Feb 11, 2025 | % Change Since: 5.99% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant achievements in free cash flow and automotive revenue growth, alongside strong design win momentum and strategic initiatives. However, it also noted challenges such as a major impairment charge, an overall revenue decline, and specific weaknesses in the IoT and communications infrastructure segments.Highlights
Exceeded Free Cash Flow Target
In 2024, GlobalFoundries significantly exceeded its free cash flow target, generating over $1 billion in adjusted free cash flow, which was approximately 3x the adjusted free cash flow of 2023.
Automotive Revenue Growth
Automotive revenue grew by 15% year-over-year in 2024, reaching a new annual record and exceeding $1 billion, marking a significant accomplishment in this end market.
Design Wins Momentum
GlobalFoundries reported a record level of design wins across all end markets, with almost 90% secured on a sole source basis, indicating strong customer partnerships and market positioning.
Advanced Packaging and Photonics Center
Announced a new center for advanced packaging and test capabilities in Malta, New York, supported by grants from New York State and the U.S. Department of Commerce.
Strong Cash Position
At the end of the fourth quarter, GlobalFoundries had a healthy combined total of cash, cash equivalents, and marketable securities amounting to $4.2 billion.
Lowlights
Impairment Charge
A onetime $935 million impairment charge on long-lived assets related to legacy investments in the Malta, New York facility was incurred, impacting financial results.
Overall Revenue Decline
Full year 2024 revenue was approximately $6.75 billion, down 9% year-over-year, mainly due to prolonged industry downturn and weak economic conditions.
IoT Revenue Decline
Home and industrial IoT revenue declined 21% year-over-year in 2024 as customers managed elevated inventory levels.
Communications Infrastructure and Data Center Revenue Decline
Full year 2024 revenue for communications infrastructure and data center declined 33% year-over-year due to expected platform transitions.
Company Guidance
In the recent earnings call, GlobalFoundries provided guidance highlighting a modest return to year-over-year revenue growth in the first quarter of 2025, following a year of sequential revenue increases throughout 2024. The company exceeded its 2024 target of generating three times the adjusted free cash flow compared to 2023, achieving over $1 billion, and aims to surpass this in 2025. For Q1 2025, GlobalFoundries anticipates revenue between $1.55 billion and $1.6 billion, with gross profit expected to be between $341 million and $384 million. The firm also projects ending 2025 with an adjusted gross margin of approximately 30%, driven by improved factory utilization, structural cost optimizations, and enriching product mix. Additionally, the company plans to maintain its capital-efficient strategy with a net CapEx of approximately $700 million for the year.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.