Global Foundries Tops Q4 Results; Shares Up 4%

GlobalFoundries Inc. (GFS) delivered solid fourth-quarter and full-year fiscal 2021 results, its second report as a publicly traded company. Following the news, at the time of writing, GFS shares gained more than 4% during the pre-market trading session.

GlobalFoundries is a semiconductor foundry, supplying complex integrated circuits (ICs) for electronic devices, which are used in every sector of the economy. Since its listing on October 28, 2021, its shares have gained 20.8% while year-to-date, its shares have lost 16%.  

Solid Results

GFS quarterly revenue rose a whopping 74% year-over-year to $1.85 billion, surpassing Street estimates of $1.81 billion.

Similarly, Q4 adjusted earnings exploded 117% year-over-year to $0.18 per share and significantly outpaced analyst estimates of $0.11 per share.

For the full year fiscal 2021, GFS reported revenue of $6.58 billion, up 36% annually, and adjusted loss stood at $0.05 per share, which is much lower compared to the prior-year adjusted loss of $2.70 per share.

Official Comments

Happy with the results, Tom Caulfield, CEO of GFS, said, “The year was also marked by a growing number of long-term partnership agreements, with 30 customers committing more than $3.2 billion toward the continued expansion of our global manufacturing footprint to support strong demand. We are executing well, and believe we are on track to deliver another year of strong growth in revenue and profitability in 2022.”

Q1FY22 Outlook

Based on the continued business momentum, GFS forecasts Q1FY22 revenue to be between $1.88 billion and $1.92 billion, versus the consensus estimates of $1.85 billion.

Similarly, Q1FY22 adjusted earnings are projected in the range of $0.21 per share to $0.27 per share, which is much higher than the consensus estimates of $0.17 per share.

Wall Streets’ View

Ahead of its earnings, Susquehanna analyst Mehdi Hosseini reiterated a Buy rating on the stock and price target of $85, which implies 51.6% upside potential to current levels.

Anticipating a meet or beat result, Hosseini said, “We expect better than seasonal Apple build in the Mar-Q combined with launches of new models by the Android OEMs to help with modest upside to wafer shipment expectations for GFS in the 1HCY22 time frame.”

With 12 Buys and 2 Holds, the stock commands a Strong Buy consensus rating. The average GlobalFoundries price target of $81.25 implies 45% upside potential to current levels.

Stock Investors

According to TipRanks’ Stock Investors tool, the Investor Sentiment is currently Very Positive on GlobalFoundries, with 7.4% of portfolios tracked by TipRanks increasing their exposure to GFS stock over the past 30 days.

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