Critical Comparison: GlobalFoundries (NASDAQ:GFS) vs. GCT Semiconductor (NYSE:GCTS)

GlobalFoundries (NASDAQ:GFS) and GCT Semiconductor (NYSE:GCTS) are both computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their risk, dividends, valuation, institutional ownership, profitability, earnings and analyst recommendations.

Valuation and Earnings

This table compares GlobalFoundries and GCT Semiconductor”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GlobalFoundries	$6.75 billion	3.23	-$265.00 million	($0.09)	-437.89
GCT Semiconductor	$9.13 million	7.47	-$12.38 million	($0.77)	-1.55

GCT Semiconductor has lower revenue, but higher earnings than GlobalFoundries. GlobalFoundries is trading at a lower price-to-earnings ratio than GCT Semiconductor, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

28.1% of GCT Semiconductor shares are owned by institutional investors. 5.4% of GCT Semiconductor shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for GlobalFoundries and GCT Semiconductor, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GlobalFoundries	3	9	4	0	2.06
GCT Semiconductor	2	0	2	0	2.00

GlobalFoundries currently has a consensus target price of $40.46, indicating a potential upside of 2.67%. GCT Semiconductor has a consensus target price of $3.50, indicating a potential upside of 192.89%. Given GCT Semiconductor’s higher possible upside, analysts plainly believe GCT Semiconductor is more favorable than GlobalFoundries.

Profitability

This table compares GlobalFoundries and GCT Semiconductor’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GlobalFoundries	-0.65%	6.64%	4.49%
GCT Semiconductor	-1,010.20%	N/A	-198.45%

Risk & Volatility

GlobalFoundries has a beta of 1.49, meaning that its stock price is 49% more volatile than the S&P 500. Comparatively, GCT Semiconductor has a beta of 1.23, meaning that its stock price is 23% more volatile than the S&P 500.

Summary

GlobalFoundries beats GCT Semiconductor on 8 of the 14 factors compared between the two stocks.

About GlobalFoundries

GlobalFoundries Inc., a semiconductor foundry, provides range of mainstream wafer fabrication services and technologies worldwide. It manufactures various semiconductor devices, including microprocessors, mobile application processors, baseband processors, network processors, radio frequency modems, microcontrollers, and power management units. GlobalFoundries Inc. has a strategic partnership with Efficient Computer to develop high-performance computer processors. The company was incorporated in 2008 and is headquartered in Malta, New York.

About GCT Semiconductor

GCT Semiconductor Holding, Inc., operates as a fabless semiconductor company, designs, develops, and markets integrated circuits for the wireless semiconductor industry. The company provides RF and modem chipsets based on 4G LTE technology, including 4G LTE, 4.5G LTE Advanced, and 4.75G LTE Advanced-Pro. It also develops and sells cellular IoT chipsets for low-speed mobile networks such as eMTC/NB-IOT/Sigfox, and other network protocols; and 5G solutions. Its products and solutions are used in smartphones, tablets, hotspots, CPEs, USB dongles, routers, and M2M applications. The company sells its products directly or indirectly through distributors to original equipment manufacturers and original design manufacturers primarily in Taiwan, China, Korea and Japan, Europe, North America and South America. The company was formerly known as Global Communication Technology, Inc. GCT Semiconductor Holding, Inc. was founded in 1998 and is headquartered in San Jose, California.