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GlobalFoundries Inc (GFS)
NASDAQ:GFS
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GlobalFoundries Inc
(NASDAQ:GFS)
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Rating:54Neutral
Price Target:
$34.00
▲(3.34% Upside)
GlobalFoundries Inc's overall stock score is driven by mixed financial performance, with strong revenue growth but profitability challenges. The earnings call provided a positive outlook with exceeded expectations and strategic growth initiatives. However, technical indicators and valuation metrics reflect bearish sentiment and ongoing profitability issues, which weigh down the overall score.
Positive Factors
Revenue Growth
Consistent revenue growth indicates strong demand and effective market strategies, particularly in automotive and data center markets.
Strategic Initiatives
Acquiring MIPS strengthens GlobalFoundries' position in AI and processor markets, enhancing its competitive edge and growth potential.
Innovative Technology Development
The new Bi-CMOS platform enhances GlobalFoundries' product offerings, catering to high-performance markets and driving long-term growth.
Negative Factors
Profitability Challenges
Ongoing profitability issues can hinder reinvestment and growth, impacting GlobalFoundries' ability to sustain competitive advantage.
Cash Flow Concerns
Declining free cash flow growth may limit GlobalFoundries' ability to invest in new technologies and strategic initiatives, affecting future growth.
Pricing Challenges
Pricing challenges can pressure margins and profitability, affecting GlobalFoundries' financial performance and competitive positioning.
GlobalFoundries Inc (GFS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$18.19B
Dividend YieldN/A
Average Volume (3M)2.66M
Price to Earnings (P/E)28.2
Beta (1Y)1.70
Revenue Growth-0.65%
EPS Growth-114.26%
CountryUS
Employees13,000
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)0.42
Shares Outstanding552,912,840
10 Day Avg. Volume3,214,785
30 Day Avg. Volume2,660,831
Financial Highlights & Ratios
PEG Ratio0.71
Price to Book (P/B)2.20
Price to Sales (P/S)3.52
P/FCF Ratio21.63
Enterprise Value/Market Cap1.10
Enterprise Value/Revenue2.91
Enterprise Value/Gross Profit12.25
Enterprise Value/Ebitda13.62
Forecast
1Y Price Target
$40.47Price Target Upside23.01% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering15
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 Key Performance Indicators (KPIs)
GlobalFoundries Inc Earnings Call Summary
Earnings Call Date:Aug 05, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 11, 2025
Earnings Call Sentiment Positive
GlobalFoundries reported a strong quarter with financial performance exceeding expectations, marked by significant growth in automotive and data center markets, and continued design win momentum. Despite a decline in smart mobile devices revenue and pricing challenges, the company's strategic initiatives and acquisitions position it well for future growth.Q2-2025 Updates
Positive Updates
Exceeded Guidance for Key Financial Metrics
GlobalFoundries delivered strong financial results in Q2 2025, exceeding the guidance midpoints for revenue, gross margin, and operating margin. Earnings per share exceeded the high end of the guidance range.
Record Automotive Revenue Growth
Automotive end market grew over 36% year-over-year and comprised nearly 1/4 of total wafer revenue. The company secured design wins across various automotive applications.
Strong Design Win Momentum
Secured nearly 200 design wins across end markets in Q2, a new quarterly record and almost double the number from a year ago.
High Growth in Communications Infrastructure and Data Center
This segment grew double-digit percentage year-over-year in Q2, with high-teens percentage revenue growth expected in 2025.
Successful Strategic Initiatives
Announced a definitive agreement to acquire MIPS, a leading supplier of AI and processor IP, expected to close later this year.
Negative Updates
Smart Mobile Devices Revenue Decline
Revenue in the smart mobile devices end market declined year-over-year due to a reduction in customer underutilization payments and ASP adjustments.
Slower Recovery in IoT Markets
The smart mobile devices and home and industrial IoT end markets experienced slower recovery due to geopolitical uncertainties and global trade tensions.
Challenges in ASP and Pricing
Expected year-over-year ASP declines in the second half of the year for smart mobile devices and to a lesser degree, for GF overall, due to strategic pricing adjustments.
Potential Impact of Tariffs
Potential supply chain cost impacts associated with tariff uncertainties are expected, though limited to roughly $20 million in the second half of 2025.
Company Guidance
During the GlobalFoundries Q2 2025 earnings call, the company reported financial results that exceeded the guidance midpoints for revenue, gross margin, and operating margin. Revenue reached $1.688 billion, representing a 6% increase sequentially and a 3% rise year-over-year, with 581,000 300-millimeter equivalent wafers shipped, marking a 7% sequential and a 12% year-over-year increase. Earnings per share surpassed the high end of their guidance range, reflecting strong profitability focus. Automotive and communications infrastructure and data center end markets showed double-digit year-over-year revenue growth, with automotive up 36% and communications infrastructure and data center up 11%. The company generated $277 million in adjusted free cash flow and remains on track to achieve over $1 billion in adjusted free cash flow for the year. Looking forward, GlobalFoundries expects third-quarter revenue of $1.675 billion with a gross margin of approximately 25.5%, and they anticipate continued growth in high-margin end markets and stabilization of consumer-centric goods demand.GlobalFoundries Inc Financial Statement Overview
Summary
GlobalFoundries Inc. shows a mixed financial health profile. The balance sheet is robust with low leverage, but the income statement reveals operational inefficiencies and profitability challenges. Cash flows are strong but declining, indicating potential liquidity concerns if not addressed.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.45
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.60
Neutral
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.55
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 6.84B | 6.75B | 7.39B | 8.11B | 6.58B | 4.85B |
| Gross Profit | 1.63B | 1.65B | 2.10B | 2.24B | 1.01B | -712.72M |
| EBITDA | 1.46B | 1.50B | 2.64B | 3.27B | 1.56B | 1.31B |
| Net Income | -115.00M | -265.00M | 1.02B | 1.45B | -254.00M | -1.35B |
Balance Sheet | ||||||
| Total Assets | 16.80B | 16.80B | 18.04B | 17.84B | 15.03B | 12.32B |
| Cash, Cash Equivalents and Short-Term Investments | 3.10B | 3.39B | 3.47B | 2.97B | 2.94B | 908.08M |
| Total Debt | 1.68B | 2.32B | 2.75B | 2.51B | 2.01B | 2.80B |
| Total Liabilities | 5.12B | 5.97B | 6.89B | 7.88B | 7.00B | 5.08B |
| Stockholders Equity | 11.41B | 10.78B | 11.10B | 9.91B | 8.03B | 7.18B |
Cash Flow | ||||||
| Free Cash Flow | 1.02B | 1.10B | 321.00M | -435.00M | 1.07B | 413.41M |
| Operating Cash Flow | 1.59B | 1.72B | 2.13B | 2.62B | 2.84B | 1.01B |
| Investing Cash Flow | -773.00M | -1.13B | -1.88B | -4.06B | -1.45B | -366.17M |
| Financing Cash Flow | -1.22B | -785.00M | -212.00M | 842.00M | 650.00M | -732.74M |
GlobalFoundries Inc Technical Analysis
Positive
32.90
Price Trends
35.06
Negative
36.52
Negative
38.12
Negative
Market Momentum
-0.55
Negative
48.69
Neutral
73.95
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 32.9 is below the 20-day moving average (MA) of 32.94, below the 50-day MA of 35.06, and below the 200-day MA of 38.12, indicating a neutral trend. The MACD of -0.55 indicates Negative momentum. The RSI at 48.69 is Neutral, neither overbought nor oversold. The STOCH value of 73.95 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 (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | 17.92B | 14.42 | 12.92% | 6.77% | 5.46% | -26.72% | |
68 Neutral | 20.89B | 47.65 | 5.87% | ― | -17.93% | -75.83% | |
67 Neutral | 24.39B | 23.35 | 11.59% | 3.11% | 4.86% | 6.44% | |
67 Neutral | 24.62B | 40.53 | 3.66% | 1.10% | -22.97% | -78.58% | |
54 Neutral | $18.19B | 28.15 | -1.01% | ― | -0.65% | -114.26% | |
53 Neutral | 35.16B | -195.94 | -2.16% | 2.79% | -35.70% | -113.08% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
Performance Comparison
GFS
GlobalFoundries Inc
33.17
-6.18
-15.71%
ASX
ASE Technology Holding Co
11.46
1.72
17.66%
AMKR
Amkor
28.31
-1.78
-5.92%
ON
ON Semiconductor
51.50
-18.24
-26.15%
STM
STMicroelectronics
28.52
0.93
3.37%
UMC
United Micro
7.26
-0.90
-11.03%
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.