GlobalFoundries stock forecast ahead of its first earnings report as a public company

On Tuesday, GlobalFoundries Inc. (NASDAQ:GFS) shares plunged by more than 6% ahead of its first quarterly earnings report as a public company. The silicon wafers maker will report results for the fiscal quarter ending 30th September 2021 after markets close.

Analysts expect GFS to announce a quarterly loss of about $0.05 per share from a revenue of $1.7 billion. The report is expected to show strength in essential lower tech-chip designs amid the global semiconductor supply constraints. 

The stock is rated buy with a Street-high price target of $100, which reflects an upside potential of more than 50% based on Tuesday’s retail price of $66.42 per share.

Is it safe to buy GlobalFoundries stock?

From a valuation perspective, GlobalFoundries shares trade at a reasonable price-sales ratio of 7.48, thus making the stock an interesting option for value investors.

However, GFS is yet to ride out the usually turbulent first few months that newly listed companies face. In addition, with the chip supply constraints still creating significant headwinds, it could be a volatile period for GFS investors.

Therefore, although analysts remain optimistic about the stock, it may be best to monitor its performance in the upcoming quarterly results before buying.

Technically, the stock seems to be trading within an ascending channel formation in the intraday chart. However, it recently pulled back to recovery from overbought conditions, pushing the stock towards the trendline support.

Therefore, investors could target technical rebound profits at about $69.05, or higher at $72.98, while $63.80 and $59.88 are crucial support levels.