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GlobalFoundries Inc (GFS)
NASDAQ:GFS
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GlobalFoundries Inc
(NASDAQ:GFS)
Rating:68Neutral
Price Target:
$45.00
▲(11.58%Upside)
Positive Factors
Government Support
Investments under the CHIPS Act in the U.S. are driving expansions at GFS’s New York facility, including advanced packaging and photonics capabilities, supported by approximately USD1.5 billion in federal funding.
Sector Focus
The company's focus is shifting towards communications, data centers, and automotive sectors, moving away from mobile and consumer segments.
Strategic Positioning
GFS emphasizes differentiated semiconductor technologies such as 22FDX® and silicon photonics, positioning itself in high-growth sectors including automotive, IoT, and data centers.
Negative Factors
Competitive Pressures
The average selling price of wafers is declining, which indicates increased competitive pressures.
Macroeconomic Challenges
Macroeconomic headwinds in the second half are expected, especially affecting consumer-related mobile and IoT segments.
Market Oversupply
Oversupply due to further deepening of weakened demand for consumer electronics, as GFS has a 41% revenue exposure to smart mobile devices.
GlobalFoundries Inc (GFS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$22.30B
Dividend YieldN/A
Average Volume (3M)1.55M
Price to Earnings (P/E)28.2
Beta (1Y)1.74
Revenue Growth-4.42%
EPS Growth-120.96%
CountryUS
Employees13,000
SectorTechnology
Sector Strength94
IndustrySemiconductors
Share Statistics
EPS (TTM)0.34
Shares Outstanding552,912,840
10 Day Avg. Volume1,529,325
30 Day Avg. Volume1,549,824
Financial Highlights & Ratios
PEG Ratio-4.09
Price to Book (P/B)2.03
Price to Sales (P/S)0.00
P/FCF Ratio21.22
Enterprise Value/Market Cap1.00
Enterprise Value/Revenue0.82
Enterprise Value/Gross Profit13.82
Enterprise Value/Ebitda2.97
Forecast
1Y Price Target
$42.54Price Target Upside5.48% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
GlobalFoundries Inc Business Overview & Revenue Model
Company DescriptionGlobalFoundries Inc (GFS) is a leading semiconductor manufacturer specializing in the production of integrated circuits for a wide range of applications. The company operates within the semiconductor industry, providing advanced manufacturing and technology development services to its clients, which include companies in sectors such as consumer electronics, automotive, industrial, and more. GlobalFoundries is known for its innovative chip design and manufacturing processes, catering to the growing demand for high-performance and energy-efficient semiconductors.
How the Company Makes MoneyGlobalFoundries Inc primarily makes money by manufacturing semiconductors for a diverse client base. The company operates on a 'fabless' model, where it does not produce its own branded semiconductor products but instead manufactures chips for other companies. Revenue is generated through multi-year contracts with these clients, who rely on GlobalFoundries' expertise in producing high-quality, customized semiconductor solutions. The company benefits from strategic partnerships with major technology firms, which provide a steady stream of orders and revenue. Additionally, GlobalFoundries invests in research and development to maintain its competitive edge and expand its portfolio of technology offerings, further contributing to its earnings.
GlobalFoundries Inc Earnings Call Summary
Earnings Call Date:May 06, 2025
(Q1-2025)
| % Change Since: 12.40%|
Next Earnings Date:Aug 05, 2025
Earnings Call Sentiment Neutral
While the company demonstrated strong performance in automotive and data center segments and maintained solid free cash flow generation, challenges such as geopolitical tensions, tariff impacts, and declines in smart mobile device revenues present significant concerns. The overall sentiment is mixed with balanced highlights and lowlights.Q1-2025 Updates
Positive Updates
Strong Revenue Growth in Key Segments
Automotive, CID, and IoT end markets grew on a year-over-year basis. Automotive revenue increased by 16% YoY, and Communications Infrastructure and Data Center (CID) revenue increased by 45% YoY.
Significant Free Cash Flow Generation
GlobalFoundries delivered $165 million of non-IFRS adjusted free cash flow, representing a free cash margin of approximately 10%.
Strategic Investments in Global Footprint
Over $7 billion has been deployed into U.S., Germany, and Singapore facilities since 2021, enhancing manufacturing scale and technology diversity.
Strong Balance Sheet and Liquidity
GlobalFoundries reported $4.7 billion of liquidity, with strong cash flow fundamentals and declining leverage.
Sole-Source Design Wins
Nearly 90% of design wins over the last four quarters have been sole-sourced, indicating strong customer reliance on GlobalFoundries.
Negative Updates
Impact of Geopolitical Tensions
Ongoing trade and tariff disputes are expected to impact global supply chain and end market demand dynamics into the second half of 2025.
Decline in Smart Mobile Devices Revenue
Smart mobile devices revenue declined approximately 21% sequentially and approximately 14% from the prior year period.
Reduced Underutilization Payments
The reduction in underutilization payments from customers led to a decline in average selling price per wafer.
Tariff-Related Cost Increases
Certain costs across the semiconductor supply chain are likely to rise due to tariff-related activities, potentially impacting margins.
Company Guidance
In the GlobalFoundries first quarter 2025 earnings call, the company provided optimistic guidance across several key metrics. The revenue for the quarter was reported at $1.585 billion, reflecting a 2% increase year-over-year, despite a 13% sequential decrease. The company achieved a gross margin of 23.9% and an operating margin of 13.4%, both at the high end of their guidance range. Notably, GlobalFoundries reported a $165 million non-IFRS adjusted free cash flow, representing a free cash flow margin of approximately 10%. For the second quarter of 2025, the company anticipates revenue to rise to $1.675 billion, with a gross margin of 25% and an operating margin of 14%. The company remains focused on maintaining strong free cash flow generation, aiming to surpass $1 billion for the year. Additionally, they highlighted a solid design win momentum, particularly in automotive and communications infrastructure, and are well-positioned to grow their serviceable addressable market by approximately 10% per annum through the end of the decade.GlobalFoundries Inc Financial Statement Overview
Summary
GlobalFoundries Inc. shows mixed financial health. The balance sheet is strong with low leverage, but income statement highlights operational inefficiencies and profitability challenges. Cash flows are positive but declining, indicating potential liquidity concerns if trends persist.Income Statement
The income statement shows a volatile trend with revenue declining from $8.1B in 2022 to $6.786B TTM but with slight growth compared to the previous year. Gross profit margin TTM is approximately 23.76%, down from 28.28% in 2022, indicating reduced efficiency. The net profit margin is negative due to losses, impacting the overall profitability. The EBIT and EBITDA margins have also deteriorated, reflecting operational challenges.55
Neutral
Balance Sheet
The balance sheet reflects a solid equity base with a debt-to-equity ratio of approximately 0.15 TTM, indicating low leverage. The equity ratio is strong at about 67.09%, offering financial stability. However, the declining equity from 2022 to TTM suggests potential risks if trends continue.70
Positive
Cash Flow
Cash flow analysis reveals a strong operating cash flow to net income ratio, indicating solid cash generation relative to reported losses. The free cash flow remains positive, though it has declined from the previous year, reflecting less cash available after capital expenditures. The free cash flow growth rate has been negative, highlighting a potential concern.65
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 |
| EBITDA | 1.54B | 2.64B | 3.27B | 1.56B | 1.31B |
| Net Income | -265.00M | 1.02B | 1.45B | -254.00M | -1.35B |
Balance Sheet | |||||
| Total Assets | 16.80B | 18.04B | 17.84B | 15.03B | 12.32B |
| Cash, Cash Equivalents and Short-Term Investments | 3.39B | 3.47B | 2.97B | 2.94B | 908.08M |
| Total Debt | 2.32B | 2.75B | 2.51B | 2.01B | 2.80B |
| 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
Positive
40.33
Price Trends
38.46
Positive
37.32
Positive
39.60
Positive
Market Momentum
0.73
Positive
56.58
Neutral
41.89
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GFS, the sentiment is Positive. The current price of 40.33 is above the 20-day moving average (MA) of 39.64, above the 50-day MA of 38.46, and above the 200-day MA of 39.60, indicating a bullish trend. The MACD of 0.73 indicates Positive momentum. The RSI at 56.58 is Neutral, neither overbought nor oversold. The STOCH value of 41.89 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $18.55B | 13.57 | 11.65% | 4.89% | 2.22% | -22.39% | |
76 Outperform | $29.16B | 27.80 | 6.32% | 0.94% | -25.47% | -70.07% | |
74 Outperform | $22.76B | 21.48 | 11.47% | 2.51% | 1.32% | 4.86% | |
72 Outperform | $25.37B | 42.12 | 7.85% | ― | -18.28% | -70.98% | |
68 Neutral | $22.30B | 28.15 | -1.69% | ― | -4.42% | -120.96% | |
64 Neutral | $40.36B | 84.25 | >-0.01% | 2.43% | -42.35% | -100.12% | |
63 Neutral | $34.60B | 5.43 | -11.64% | 1.84% | 5.30% | -18.55% |
* Technology Sector Average
Performance Comparison
GFS
GlobalFoundries Inc
40.33
-15.91
-28.29%
ASX
ASE Technology Holding Co
10.52
-0.29
-2.68%
MCHP
Microchip
74.78
-15.81
-17.45%
ON
ON Semiconductor
60.72
-16.61
-21.48%
STM
STMicroelectronics
32.55
-8.98
-21.62%
UMC
United Micro
7.48
-0.02
-0.27%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.