Yahoo Finance Analysts Expect GLOBALFOUNDRIES Inc. (NASDAQ:GFS) To Breakeven Soon
GLOBALFOUNDRIES Inc. (NASDAQ:GFS) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. GLOBALFOUNDRIES Inc. operates as a semiconductor foundry worldwide. With the latest financial year loss of US$1.3b and a trailing-twelve-month loss of US$817m, the US$24b market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is GLOBALFOUNDRIES' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.
Check out our latest analysis for GLOBALFOUNDRIES
GLOBALFOUNDRIES is bordering on breakeven, according to the 15 American Semiconductor analysts. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$789m in 2022. The company is therefore projected to breakeven around 12 months from now or less. We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 54% is expected, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Given this is a high-level overview, we won’t go into details of GLOBALFOUNDRIES' upcoming projects, but, take into account that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 32% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on GLOBALFOUNDRIES, so if you are interested in understanding the company at a deeper level, take a look at GLOBALFOUNDRIES' company page on Simply Wall St. We've also compiled a list of key factors you should look at:
Valuation: What is GLOBALFOUNDRIES worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether GLOBALFOUNDRIES is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on GLOBALFOUNDRIES’s board and the CEO’s background.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
