GLOBALFOUNDRIES (NASDAQ:GFS) & Semtech (NASDAQ:SMTC) Financial Comparison

GLOBALFOUNDRIES (NASDAQ:GFS) and Semtech (NASDAQ:SMTC) are both computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, earnings, analyst recommendations, institutional ownership, risk, profitability and valuation.

Volatility & Risk

GLOBALFOUNDRIES has a beta of 1.56, suggesting that its share price is 56% more volatile than the S&P 500. Comparatively, Semtech has a beta of 1.55, suggesting that its share price is 55% more volatile than the S&P 500.

Profitability

This table compares GLOBALFOUNDRIES and Semtech’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GLOBALFOUNDRIES	12.66%	8.78%	5.33%
Semtech	-129.52%	-154.99%	-1.82%

Valuation and Earnings

This table compares GLOBALFOUNDRIES and Semtech’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GLOBALFOUNDRIES	$7.39 billion	4.14	$1.02 billion	$1.62	34.26
Semtech	$868.76 million	2.36	-$1.09 billion	($16.91)	-1.87

GLOBALFOUNDRIES has higher revenue and earnings than Semtech. Semtech is trading at a lower price-to-earnings ratio than GLOBALFOUNDRIES, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and price targets for GLOBALFOUNDRIES and Semtech, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GLOBALFOUNDRIES	0	7	6	0	2.46
Semtech	0	1	11	0	2.92

GLOBALFOUNDRIES presently has a consensus price target of $59.00, indicating a potential upside of 6.31%. Semtech has a consensus price target of $48.90, indicating a potential upside of 54.45%. Given Semtech’s stronger consensus rating and higher possible upside, analysts plainly believe Semtech is more favorable than GLOBALFOUNDRIES.

Summary

GLOBALFOUNDRIES beats Semtech on 9 of the 12 factors compared between the two stocks.

About GLOBALFOUNDRIES

GLOBALFOUNDRIES Inc. operates as a semiconductor foundry worldwide. The company manufactures a range of semiconductor devices, including microprocessors, mobile application processors, baseband processors, network processors, radio frequency modems, microcontrollers, and power management units; and offers mainstream wafer fabrication services and technologies. The company was founded in 2009 and is based in Malta, New York.

About Semtech

Semtech Corporation designs, develops, manufactures, and markets analog and mixed-signal semiconductor and advanced algorithms. It provides signal integrity products, including a portfolio of optical data communications and video transport products used in various infrastructure, and industrial applications; a portfolio of integrated circuits for data centers, enterprise networks, passive optical networks, wireless base station optical transceivers, and high-speed interface applications; and video products for broadcast applications, as well as video-over-IP technology for professional audio video applications. The company offers protection products, such as filter and termination devices that are integrated with the transient voltage suppressor devices, which protect electronic systems from voltage spikes; and sensing products comprising a portfolio of specialized radio frequency products used in various industrial, medical, and communications applications, as well as specialized sensing products. In addition, it provides switching voltage regulators, combination switching and linear regulators, smart regulators, isolated switches, and wireless charging related products. Further, it offers portfolio of IoT solutions, such as modules, gateways, routers, and connected services; and portfolio of connected services, including wireless connectivity and cloud-based services for industrial, medical and communications applications. The company serves original equipment manufacturers and industrial end-markets. It sells its products directly, as well as through independent sales representative firms and independent distributors in Asia- Pacific, North America, and Europe. Semtech Corporation was incorporated in 1960 and is headquartered in Camarillo, California.