GLOBALFOUNDRIES INC (GFS) Stock Fundamental Analysis
NASDAQ:GFS - Nasdaq - KYG393871085 - Common Stock - Currency: USD
We assign a fundamental rating of 4 out of 10 to GFS. GFS was compared to 110 industry peers in the Semiconductors & Semiconductor Equipment industry. While GFS seems to be doing ok healthwise, there are quite some concerns on its profitability. GFS has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
GFS had positive earnings in the past year.
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
Looking at the Return On Assets, with a value of -0.68%, GFS is in line with its industry, outperforming 42.73% of the companies in the same industry.
Looking at the Return On Equity, with a value of -1.01%, GFS is in line with its industry, outperforming 43.64% of the companies in the same industry.
GFS's Return On Invested Capital of 4.22% is in line compared to the rest of the industry. GFS outperforms 59.09% of its industry peers.
The Average Return On Invested Capital over the past 3 years for GFS is significantly below the industry average of 10.86%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.68% | ||
| ROE | -1.01% | ||
| ROIC | 4.22% |
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
With a decent Operating Margin value of 11.22%, GFS is doing good in the industry, outperforming 66.36% of the companies in the same industry.
GFS has a Gross Margin of 23.77%. This is in the lower half of the industry: GFS underperforms 77.27% of its industry peers.
GFS's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.22% | ||
| PM (TTM) | N/A | ||
| GM | 23.77% |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y15.97%
GM growth 5YN/A
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so GFS is destroying value.
GFS has about the same amout of shares outstanding than it did 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
GFS has an Altman-Z score of 1.85. This is not the best score and indicates that GFS is in the grey zone with still only limited risk for bankruptcy at the moment.
With a Altman-Z score value of 1.85, GFS is not doing good in the industry: 65.45% of the companies in the same industry are doing better.
GFS has a debt to FCF ratio of 1.73. This is a very positive value and a sign of high solvency as it would only need 1.73 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.73, GFS is in the better half of the industry, outperforming 70.00% of the companies in the same industry.
GFS has a Debt/Equity ratio of 0.14. This is a healthy value indicating a solid balance between debt and equity.
GFS has a Debt to Equity ratio (0.14) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.14 | ||
| Debt/FCF | 1.73 | ||
| Altman-Z | 1.85 |
ROIC/WACC0.39
WACC10.9%
2.3 Liquidity
GFS has a Current Ratio of 2.63. This indicates that GFS is financially healthy and has no problem in meeting its short term obligations.
GFS's Current ratio of 2.63 is in line compared to the rest of the industry. GFS outperforms 46.36% of its industry peers.
A Quick Ratio of 1.92 indicates that GFS should not have too much problems paying its short term obligations.
The Quick ratio of GFS (1.92) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.63 | ||
| Quick Ratio | 1.92 |
3. Growth
3.1 Past
GFS shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -13.30%.
Looking at the last year, GFS shows a decrease in Revenue. The Revenue has decreased by -0.65% 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)-13.3%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%10.53%
Revenue 1Y (TTM)-0.65%
Revenue growth 3Y0.83%
Revenue growth 5Y3.03%
Sales Q2Q%3.43%
3.2 Future
The Earnings Per Share is expected to grow by 20.17% on average over the next years. This is a very strong growth
Based on estimates for the next years, GFS will show a quite strong growth in Revenue. The Revenue will grow by 9.56% on average per year.
EPS Next Y4.48%
EPS Next 2Y16.94%
EPS Next 3Y18.55%
EPS Next 5Y20.17%
Revenue Next Year2.72%
Revenue Next 2Y6.28%
Revenue Next 3Y6.99%
Revenue Next 5Y9.56%
3.3 Evolution
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 20.38, the valuation of GFS can be described as rather expensive.
GFS's Price/Earnings ratio is a bit cheaper when compared to the industry. GFS is cheaper than 77.27% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 26.85. GFS is valued slightly cheaper when compared to this.
Based on the Price/Forward Earnings ratio of 15.57, the valuation of GFS can be described as correct.
Based on the Price/Forward Earnings ratio, GFS is valued a bit cheaper than 80.00% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 34.98. GFS is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.38 | ||
| Fwd PE | 15.57 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of GFS indicates a rather cheap valuation: GFS is cheaper than 95.45% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, GFS is valued cheaply inside the industry as 83.64% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.96 | ||
| EV/EBITDA | 7.09 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates GFS does not grow enough to justify the current Price/Earnings ratio.
A more expensive valuation may be justified as GFS's earnings are expected to grow with 18.55% in the coming years.
PEG (NY)4.55
PEG (5Y)N/A
EPS Next 2Y16.94%
EPS Next 3Y18.55%
5. Dividend
5.1 Amount
GFS does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
33.22
-0.51 (-1.51%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners102.25%
Inst Owner ChangeN/A
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap18.43B
Analysts76.67
Price Target45.28 (36.3%)
Short Float %1.77%
Short Ratio4.72
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)16.9%
Min EPS beat(2)16.57%
Max EPS beat(2)17.23%
EPS beat(4)4
Avg EPS beat(4)15.25%
Min EPS beat(4)2.49%
Max EPS beat(4)24.71%
EPS beat(8)8
Avg EPS beat(8)18.57%
EPS beat(12)12
Avg EPS beat(12)15.68%
EPS beat(16)16
Avg EPS beat(16)293.99%
Revenue beat(2)0
Avg Revenue beat(2)-0.46%
Min Revenue beat(2)-0.56%
Max Revenue beat(2)-0.35%
Revenue beat(4)0
Avg Revenue beat(4)-0.52%
Min Revenue beat(4)-0.92%
Max Revenue beat(4)-0.23%
Revenue beat(8)2
Avg Revenue beat(8)-0.37%
Revenue beat(12)4
Avg Revenue beat(12)-0.29%
Revenue beat(16)7
Avg Revenue beat(16)-0.13%
PT rev (1m)2.12%
PT rev (3m)-5%
EPS NQ rev (1m)-4.81%
EPS NQ rev (3m)-14.51%
EPS NY rev (1m)0%
EPS NY rev (3m)0.76%
Revenue NQ rev (1m)-5.2%
Revenue NQ rev (3m)-6.34%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.11%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.38 | ||
| Fwd PE | 15.57 | ||
| P/S | 2.69 | ||
| P/FCF | 18.96 | ||
| P/OCF | 11.56 | ||
| P/B | 1.61 | ||
| P/tB | 1.72 | ||
| EV/EBITDA | 7.09 |
EPS(TTM)1.63
EY4.91%
EPS(NY)2.13
Fwd EY6.42%
FCF(TTM)1.75
FCFY5.27%
OCF(TTM)2.87
OCFY8.65%
SpS12.33
BVpS20.58
TBVpS19.28
PEG (NY)4.55
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.68% | ||
| ROE | -1.01% | ||
| ROCE | 5.34% | ||
| ROIC | 4.22% | ||
| ROICexc | 5.42% | ||
| ROICexgc | 5.79% | ||
| OM | 11.22% | ||
| PM (TTM) | N/A | ||
| GM | 23.77% | ||
| FCFM | 14.21% |
ROA(3y)4.06%
ROA(5y)-0.08%
ROE(3y)7.11%
ROE(5y)-0.12%
ROIC(3y)5.8%
ROIC(5y)N/A
ROICexc(3y)7.4%
ROICexc(5y)N/A
ROICexgc(3y)7.71%
ROICexgc(5y)N/A
ROCE(3y)7.34%
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y15.97%
GM growth 5YN/A
F-Score5
Asset Turnover0.41
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.14 | ||
| Debt/FCF | 1.73 | ||
| Debt/EBITDA | 0.69 | ||
| Cap/Depr | 42.57% | ||
| Cap/Sales | 9.09% | ||
| Interest Coverage | 9.04 | ||
| Cash Conversion | 71.51% | ||
| Profit Quality | N/A | ||
| Current Ratio | 2.63 | ||
| Quick Ratio | 1.92 | ||
| Altman-Z | 1.85 |
F-Score5
WACC10.9%
ROIC/WACC0.39
Cap/Depr(3y)117.56%
Cap/Depr(5y)97.05%
Cap/Sales(3y)23.8%
Cap/Sales(5y)22.09%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-13.3%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%10.53%
EPS Next Y4.48%
EPS Next 2Y16.94%
EPS Next 3Y18.55%
EPS Next 5Y20.17%
Revenue 1Y (TTM)-0.65%
Revenue growth 3Y0.83%
Revenue growth 5Y3.03%
Sales Q2Q%3.43%
Revenue Next Year2.72%
Revenue Next 2Y6.28%
Revenue Next 3Y6.99%
Revenue Next 5Y9.56%
EBIT growth 1Y-16.34%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year169.45%
EBIT Next 3Y50.01%
EBIT Next 5Y31.63%
FCF growth 1Y247.05%
FCF growth 3Y0.75%
FCF growth 5YN/A
OCF growth 1Y-27.38%
OCF growth 3Y-15.35%
OCF growth 5Y28.22%