Valens Semiconductor (NYSE:VLN) & GLOBALFOUNDRIES (NASDAQ:GFS) Critical Analysis

Valens Semiconductor (NYSE:VLN – Get Rating) and GLOBALFOUNDRIES (NASDAQ:GFS – Get Rating) are both computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, earnings, dividends, analyst recommendations, risk, valuation and institutional ownership.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Valens Semiconductor	-30.50%	-13.27%	-11.64%
GLOBALFOUNDRIES	17.86%	17.08%	9.17%

Risk and Volatility

Valens Semiconductor has a beta of 0.23, indicating that its stock price is 77% less volatile than the S&P 500. Comparatively, GLOBALFOUNDRIES has a beta of 2.05, indicating that its stock price is 105% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings for Valens Semiconductor and GLOBALFOUNDRIES, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Valens Semiconductor	0	0	3	0	3.00
GLOBALFOUNDRIES	0	1	11	0	2.92

Valens Semiconductor currently has a consensus target price of $8.00, indicating a potential upside of 145.40%. GLOBALFOUNDRIES has a consensus target price of $79.86, indicating a potential upside of 19.60%. Given Valens Semiconductor’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Valens Semiconductor is more favorable than GLOBALFOUNDRIES.

Earnings and Valuation

This table compares Valens Semiconductor and GLOBALFOUNDRIES’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Valens Semiconductor	$90.71 million	3.55	-$27.67 million	($0.27)	-12.07
GLOBALFOUNDRIES	$8.11 billion	4.38	$1.45 billion	$2.63	25.39

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

Insider and Institutional Ownership

27.0% of Valens Semiconductor shares are owned by institutional investors. Comparatively, 16.1% of GLOBALFOUNDRIES shares are owned by institutional investors. 58.9% of Valens Semiconductor shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

GLOBALFOUNDRIES beats Valens Semiconductor on 10 of the 14 factors compared between the two stocks.

About Valens Semiconductor

(Get Rating)

Valens Semiconductor Ltd. engages in the provision of semiconductor products that enables high-speed video and data transmission for the audio-video and automotive industries. It offers HDBaseT technology, which enables the simultaneous delivery of ultra-high-definition digital video and audio, Ethernet, USB, control signals, and power through a single long-reach cable. The company offers audio-video solutions for the enterprise, education, digital signage, medical and residential, and industrial markets; and automotive solutions, which provide chipsets that support advanced driver-assistance systems, automated driving systems, infotainment, telecommunications, and basic connectivity. It serves customers through distributors and representatives in Israel, China, Hong Kong, the United States, Mexico, Japan, and internationally. The company was incorporated in 2006 and is headquartered in Hod Hasharon, Israel.

About GLOBALFOUNDRIES

(Get Rating)

GLOBALFOUNDRIES Inc. operates as a semiconductor foundry worldwide. It manufactures integrated circuits, which enable various electronic devices that are pervasive. The company manufactures a range of semiconductor devices, including microprocessors, mobile application processors, baseband processors, network processors, radio frequency modems, microcontrollers, power management units, and microelectromechanical systems, as well as offers mainstream wafer fabrication services and technologies. The company was founded in 2009 and is based in Malta, New York.