In a report released today, Surinder Thind from Jefferies downgraded Globant SA to a Hold, with a price target of $61.00.
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Surinder Thind has given his Hold rating due to a combination of factors affecting Globant SA’s performance. The company’s organic growth has been trailing behind its peers, largely due to its exposure to regions and sectors that are not performing well. This trend is expected to persist, with industry conditions unlikely to improve significantly in the near future. Additionally, the introduction of a new business model is anticipated to take time before it contributes to normalized growth.
Another concern is the company’s deal pipeline, which, despite showing growth, has not translated into an increased backlog. This is attributed to client caution and the complexity of larger deals, particularly in the Latin American market, which constitutes a significant portion of Globant’s revenue. Furthermore, the new AI pods subscription model is expected to impact revenue negatively, despite potential improvements in gross margins. Given these challenges, Thind has adjusted the price target to $61, reflecting a cautious outlook on the stock’s near-term potential.
In another report released on November 18, UBS also maintained a Hold rating on the stock with a $70.00 price target.