What Our Analysts Know About GlobalFoundries

GlobalFoundries logged a -2.91% change during today's afternoon session, and is now trading at a price of $65.83 per share. The S&P 500 index moved -0.31% and the Nasdaq posted a -0.64% change.

GlobalFoundries shares moved -9.15% over the last 52 weeks, with a high of $75.48 and a low of $36.81. During this time, the stock outperformed the S&P 500 index by 4.97%. As of January 2022, the company's 50-day average price is $64.0. GLOBALFOUNDRIES Inc. is a global semiconductor foundry. The large-cap Technology company is based in Malta, NY. GlobalFoundries has not offered any dividends in the last year.

Snapshot of the Company's Negative and Irregular Margins:

2019-12-31 2020-12-31 2021-12-31 2022-12-31
Revenue (MM) $5,813 $4,851 $6,585 $8,108
Revenue Growth n/a -16.55% 35.76% 23.13%
Gross Margins -9.16% -14.69% 15.39% 27.61%
Gross Margins Growth n/a -60.37% 204.77% 79.4%
Operating Margins -27.95% -34.14% -0.91% 14.39%
Operating Margins Growth n/a -22.15% 97.33% 1681.32%
Net Margins -23.59% -27.78% -3.8% 17.86%
Net Margins Growth n/a -17.76% 86.32% 570.0%
Earnings Per Share -$2.58 -$2.53 -$0.49 $2.62
EPS Growth n/a 1.94% 80.63% 634.69%
Diluted Shares (MM) 532 532 508 552
Free Cash Flow (MM) -$276 $413 $1,073 -$435
FCF Growth n/a 249.79% 159.48% -140.55%
Capital Expenditures (MM) $773 $592 $1,766 $3,059
Net Debt / EBITDA 1.07 1.21 -0.51 0.05

GlobalFoundries Is Currently Fairly Valued:

Compared to the Technology sector's average of 27.16, GlobalFoundries has a trailing twelve month P/E ratio of 24.2 and, according to its EPS guidance of 3.19, an expected P/E ratio of 20.63. GlobalFoundries's PEG ratio is 0.15 based on its 157.8% annual average growth rate of historical and projected earnings per share. However, we believe that it is more prudent to calculate the PEG ratio using the broader market's 5-year expected EPS growth rate of 13.05%, because the growth rate implied by GlobalFoundries's past and expected EPS is probably not sustainable. This more prudent approach shows a PEG ratio of 1.85, which suggests that the company's shares are actually overvalued.

However, GlobalFoundries is likely undervalued in terms of its equity because its P/B ratio is 3.949 compared to its sector average of 6.23. However, the company's shares are now trading 101.18% above their fair value as expressed by Benjamin Graham's formula:

√(22.5 * EPS * book value per share) = √(22.5 * 2.62 * 18.16) = $32.72

GlobalFoundries Is the Subject of Mixed Market Indicators:

16 analysts are following GlobalFoundries and have set target prices ranging from $38.0 to $100.0 per share. On average, they have given the company a rating of buy. At the current price of $65.83, GFS is trading -15.61% away from its average analyst target price of $78.0 per share, implying an analyst consensus of some upside potential for the stock.

The company has an above average percentage of its shares sold short since 14.77% of the company's shares are tied to short positions. Institutions own 105.07% of GlobalFoundries's shares, while the insider ownership rate stands at 0.0%. The biggest shareholder is FMR, LLC with a 6% stake in the company worth approximately $2,111,469,071.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.