GlobalFoundries (NASDAQ:GFS) versus ARM (NASDAQ:ARM) Financial Survey

ARM (NASDAQ:ARM) and GlobalFoundries (NASDAQ:GFS) are both large-cap technology companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, risk, valuation, dividends, analyst recommendations, earnings and institutional ownership.

Institutional & Insider Ownership

7.5% of ARM shares are held by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares ARM and GlobalFoundries”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ARM	$5.46 billion	39.21	$904.00 million	$0.87	230.55
GlobalFoundries	$7.15 billion	3.30	$885.00 million	$0.35	122.94

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

Profitability

This table compares ARM and GlobalFoundries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ARM	17.13%	11.57%	8.99%
GlobalFoundries	2.81%	7.16%	5.02%

Risk and Volatility

ARM has a beta of 3.93, meaning that its stock price is 293% more volatile than the S&P 500. Comparatively, GlobalFoundries has a beta of 1.78, meaning that its stock price is 78% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for ARM and GlobalFoundries, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ARM	1	7	18	0	2.65
GlobalFoundries	2	10	8	0	2.30

ARM presently has a consensus price target of $296.38, suggesting a potential upside of 47.76%. GlobalFoundries has a consensus price target of $67.79, suggesting a potential upside of 57.54%. Given GlobalFoundries’ higher possible upside, analysts plainly believe GlobalFoundries is more favorable than ARM.

Summary

ARM beats GlobalFoundries on 11 of the 13 factors compared between the two stocks.

About ARM

Arm Holdings plc designs and licenses semiconductor technology, including processor architectures and related intellectual property. Rather than manufacturing chips, the company licenses its designs and collects royalties on products that use them. Arm’s offerings include Cortex CPUs, Mali graphics processors, Neoverse infrastructure platforms and other technology for applications ranging from smartphones and consumer electronics to automotive systems, the Internet of Things and cloud computing.

About GlobalFoundries

GlobalFoundries is a semiconductor foundry that manufactures integrated circuits for customers that design their own chips. Its services include wafer fabrication, process technology development, packaging support and design enablement, helping customers bring semiconductor products to market without operating their own fabrication facilities. The company focuses on specialty technologies used in areas such as automotive electronics, communications, industrial systems, smart devices and data centers.