We assign a fundamental rating of 4 out of 10 to GFS. GFS was compared to 113 industry peers in the Semiconductors & Semiconductor Equipment industry. The financial health of GFS is average, but there are quite some concerns on its profitability. GFS is not valued too expensively and it also shows a decent growth rate.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year GFS was profitable.
GFS had a positive operating cash flow in the past year.
In multiple years GFS reported negative net income over the last 5 years.
GFS had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

The Return On Assets of GFS (-0.26%) is comparable to the rest of the industry.
Looking at the Return On Equity, with a value of -0.38%, GFS is in line with its industry, outperforming 46.90% of the companies in the same industry.
GFS has a Return On Invested Capital (4.20%) which is in line with its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for GFS is below the industry average of 10.75%.

		Industry Rank	Sector Rank
ROA	-0.26%
ROE	-0.38%
ROIC	4.2%

ROA(3y)4.06%

ROA(5y)-0.08%

ROE(3y)7.11%

ROE(5y)-0.12%

ROIC(3y)5.8%

ROIC(5y)N/A

1.3 Margins

GFS has a better Operating Margin (11.44%) than 66.37% of its industry peers.
Looking at the Gross Margin, with a value of 24.02%, GFS is doing worse than 76.99% of the companies in the same industry.
GFS's Gross Margin has improved in the last couple of years.

		Industry Rank	Sector Rank
OM	11.44%
PM (TTM)	N/A
GM	24.02%

OM growth 3YN/A

OM growth 5YN/A

PM growth 3YN/A

PM growth 5YN/A

GM growth 3Y15.97%

GM growth 5YN/A

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

GFS has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for GFS remains at a similar level compared to 1 year ago.
GFS has more shares outstanding than it did 5 years ago.
The debt/assets ratio for GFS has been reduced compared to a year ago.

2.2 Solvency

An Altman-Z score of 2.81 indicates that GFS is not a great score, but indicates only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 2.81, GFS is doing worse than 61.95% of the companies in the same industry.
The Debt to FCF ratio of GFS is 1.43, which is an excellent value as it means it would take GFS, only 1.43 years of fcf income to pay off all of its debts.
GFS's Debt to FCF ratio of 1.43 is fine compared to the rest of the industry. GFS outperforms 71.68% of its industry peers.
GFS has a Debt/Equity ratio of 0.13. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of GFS (0.13) is comparable to the rest of the industry.

		Industry Rank	Sector Rank
Debt/Equity	0.13
Debt/FCF	1.43
Altman-Z	2.81

ROIC/WACC0.4

WACC10.38%

2.3 Liquidity

A Current Ratio of 3.03 indicates that GFS has no problem at all paying its short term obligations.
The Current ratio of GFS (3.03) is comparable to the rest of the industry.
GFS has a Quick Ratio of 2.24. This indicates that GFS is financially healthy and has no problem in meeting its short term obligations.
With a Quick ratio value of 2.24, GFS perfoms like the industry average, outperforming 53.98% of the companies in the same industry.

		Industry Rank	Sector Rank
Current Ratio	3.03
Quick Ratio	2.24

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

The earnings per share for GFS have decreased by -6.32% in the last year.
Looking at the last year, GFS shows a small growth in Revenue. The Revenue has grown by 0.25% in the last year.
Measured over the past years, GFS shows a small growth in Revenue. The Revenue has been growing by 3.03% on average per year.

EPS 1Y (TTM)-6.32%

EPS 3YN/A

EPS 5YN/A

EPS Q2Q%0%

Revenue 1Y (TTM)0.25%

Revenue growth 3Y0.83%

Revenue growth 5Y3.03%

Sales Q2Q%-2.93%

3.2 Future

Based on estimates for the next years, GFS will show a very strong growth in Earnings Per Share. The EPS will grow by 20.17% on average per year.
GFS is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 9.44% yearly.

EPS Next Y6.26%

EPS Next 2Y8.64%

EPS Next 3Y14.28%

EPS Next 5Y20.17%

Revenue Next Year0.26%

Revenue Next 2Y3.13%

Revenue Next 3Y5%

Revenue Next 5Y9.44%

3.3 Evolution

The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 26.29 indicates a quite expensive valuation of GFS.
GFS's Price/Earnings ratio is rather cheap when compared to the industry. GFS is cheaper than 84.07% of the companies in the same industry.
GFS's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.21.
With a Price/Forward Earnings ratio of 23.27, GFS is valued on the expensive side.
Based on the Price/Forward Earnings ratio, GFS is valued a bit cheaper than the industry average as 78.76% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 24.26, GFS is valued at the same level.

		Industry Rank	Sector Rank
PE	26.29
Fwd PE	23.27

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, GFS is valued cheaply inside the industry as 94.69% of the companies are valued more expensively.
GFS's Price/Free Cash Flow ratio is rather cheap when compared to the industry. GFS is cheaper than 91.15% of the companies in the same industry.

		Industry Rank	Sector Rank
P/FCF	20.44
EV/EBITDA	10.2

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
A more expensive valuation may be justified as GFS's earnings are expected to grow with 14.28% in the coming years.