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Globant SA (GLOB)
NYSE:GLOB
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Globant SA
(NYSE:GLOB)
Rating:68Neutral
Price Target:
$99.00
▲(6.60%Upside)
Positive Factors
Demand Pipeline
Demand pipeline remains robust, growing 20% year-over-year.
Valuation
The stock now trades at a historically-low 12-month forward P/E of 16x, which is more than 2.5 standard deviations below its roughly 30x average over the past 3 years.
Negative Factors
Earnings Performance
Globant reported fiscal first-quarter results that came in weaker than consensus expectations for revenue and EPS.
Macroeconomic Impact
Clients across multiple verticals delayed projects and moderated spending levels because of the uncertain global trade environment.
Revenue Growth Expectations
Management lowering 2025 organic revenue growth expectations to roughly flat year-over-year implies mid-single-digit negative growth in the second half of 2025.
Globant SA (GLOB) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.91B
Dividend YieldN/A
Average Volume (3M)1.10M
Price to Earnings (P/E)26.8
Beta (1Y)1.34
Revenue Growth11.90%
EPS Growth-11.15%
CountryUS
Employees31,280
SectorTechnology
Sector Strength91
IndustryInformation Technology Services
Share Statistics
EPS (TTM)1.50
Shares Outstanding44,045,560
10 Day Avg. Volume1,178,862
30 Day Avg. Volume1,096,576
Financial Highlights & Ratios
PEG Ratio-2.86
Price to Book (P/B)1.93
Price to Sales (P/S)0.00
P/FCF Ratio17.98
Enterprise Value/Market Cap1.07
Enterprise Value/Revenue3.98
Enterprise Value/Gross Profit48.00
Enterprise Value/Ebitda19.56
Forecast
1Y Price Target
$118.86Price Target Upside27.99% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering15
Globant SA Business Overview & Revenue Model
Company DescriptionGlobant S.A. operates as a technology services company worldwide. It offers e-commerce, new distribution capabilities, augmented revenue management, hyper connected operation, and conversational user experience services through reinvention studios; digital lending, commercial effectiveness, finance, sustainability, regulation analytic, transformation and post-merger integration, and payment and open banking services; and game and graphic engineering, UI and UX design, game as a service, DevOps, and online services, as well as high tech tools. The company also provides smart farming, image diagnosis, healthcare interoperability, genomics data processing, telemedicine and medical device, research and development, and precision medicine services; media and entertainment, and travel and hospitality services; cloud transformation advice, building cloud environment, moving workloads to the cloud, cloud support and operation, chaos engineering, and site reliability engineering services; and data strategies, insights, data platforms, MLOps, and data as a product services. In addition, it offers agile delivery, blockchain, business and cultural hacking, conversational interface, cybersecurity, design, digital sales and marketing, enterprise applications, internet of thing, metaverse, process optimization, quality engineering, salesforce, smart venue, UI engineering, and sustainable business solutions. Further, the company provides smart underwriting, monitoring, and digital collection services; digital experience platforms; product strategy, management, and delivery services; and strategic architecture consulting, platforms evolution, and augmented composable solutions. Additionally, it operates augmented coding and testing, StarMeUp, PagoChat, ShopChat, and Walmeric platforms. The company was formerly known as IT Outsourcing S.L. and changed its name to Globant S.A. in December 2012. Globant S.A. was founded in 2003 and is based in Luxembourg.
How the Company Makes MoneyGlobant SA generates revenue primarily through its service offerings in software development and IT consulting. The company operates under a project-based revenue model, where income is derived from the delivery of customized technology solutions and ongoing support services. Key revenue streams include application development, platform modernization, and digital transformation consulting. Globant collaborates with a variety of clients, ranging from large enterprises to startups, and builds long-term partnerships to ensure continuous engagement and value delivery. Additionally, the company invests in strategic partnerships with leading technology providers and acquires smaller firms to enhance its service offerings and expand its global footprint.
Globant SA Earnings Call Summary
Earnings Call Date:May 15, 2025
(Q1-2025)
| % Change Since: -30.09%|
Next Earnings Date:Aug 14, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a balanced sentiment with solid revenue growth, strategic investments, and innovative models countered by macroeconomic challenges and regional declines, particularly in Latin America.Q1-2025 Updates
Positive Updates
Solid Revenue Growth
Revenues reached $611.1 million, representing a 7% increase year-over-year, and 8.6% in constant currency.
Strong Pipeline and Market Expansion
The pipeline remains robust with a 20% increase over last year, and strong growth in new markets like The Middle East, APAC, and Europe.
Innovative AI Subscription Model
Introduction of the Globant subscription model offering AI-powered capacity through AI Pods, with early traction and adoption by clients like YPF and JM Family.
Strategic Deals and Partnerships
Announced partnerships with the Saudi Pro League, Formula 1, and AIB, showcasing the application of technology solutions.
Recognition from Major Partners
Received multiple recognitions from Google, Amazon Web Services, and Adobe for strong strategic relationships.
Negative Updates
Performance Below Expectations
Q1 performance came in below initial expectations due to a challenging macroeconomic environment.
Impact of Macroeconomic Challenges
US recession probability increased, consumer spending softened, and trade tariffs impacted customer spending.
Regional Decline in Latin America
Challenging performance in Latin America with a nearly 9% year-over-year decline, particularly in Mexico and Brazil.
Delayed Project Ramps
Delays in project ramps in large accounts, especially in tariff-impacted industries like Airlines, Pharma, and High Tech.
Adjusted Operating Margin Below Expectations
Adjusted operating margin for the quarter was 14.8%, falling short due to lower-than-expected revenues.
Company Guidance
During Globant's First Quarter 2025 earnings call, the company provided revised guidance reflecting the current challenging macroeconomic environment. Revenues for Q1 reached $611.1 million, marking a 7% year-over-year increase, with a constant currency growth of 8.6%. However, this was slightly below the February guidance due to uncertainties such as U.S. recession risks, softened consumer spending, and trade tariff impacts, particularly affecting Latin America. For Q2 2025, Globant projected at least $612 million in revenues, representing a 4.2% year-over-year growth, and maintained an adjusted operating margin target of 15% for both Q2 and the full year. The full-year 2025 revenue guidance was revised to at least $2,464 million, indicating a 2.0% year-over-year growth. The company emphasized strategic investments in AI Industry studios and 100-squared accounts as key growth drivers and highlighted a robust 20% year-over-year increase in their pipeline. Additionally, Globant introduced a consumption-based subscription model to enhance service delivery and client engagement. The effective income tax rate for both Q2 and the full year is expected to be between 20% and 22%, with an adjusted diluted EPS forecast of at least $1.52 for Q2 and $6.10 for the full year, based on the assumption of 45.7 million diluted shares outstanding for Q2 and 45.8 million for the year.Globant SA Financial Statement Overview
Summary
Globant SA demonstrates strong financial performance with robust revenue growth, stable profitability, and effective cash flow management. However, the increase in total debt and slight decline in net profit margin require monitoring.Income Statement
Globant SA has demonstrated strong revenue growth with a TTM increase from the previous year, supported by a consistent gross profit margin around 36%. The net profit margin slightly declined in the latest TTM due to reduced net income, but remains healthy. EBIT and EBITDA margins exhibit stability, reflecting efficient operations and cost management.85
Very Positive
Balance Sheet
The company's balance sheet is robust with a favorable equity ratio and controlled debt levels, as indicated by a moderate debt-to-equity ratio. Stockholders' equity has grown, enhancing financial stability. However, the increasing total debt over recent periods may require monitoring to prevent leverage from becoming excessive.78
Positive
Cash Flow
Operating cash flow is strong, consistently covering net income, indicating effective cash conversion. Free cash flow has grown steadily, which is a positive sign for sustainability and potential reinvestment or return to shareholders. The free cash flow to net income ratio is healthy, though there is room for improvement in managing capital expenditures.82
Very Positive
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 2.42B | 2.10B | 1.78B | 1.30B | 814.14M |
| Gross Profit | 863.37M | 755.76M | 669.39M | 494.99M | 304.33M |
| EBITDA | 405.14M | 361.54M | 317.25M | 218.08M | 135.43M |
| Net Income | 165.73M | 158.54M | 148.89M | 96.06M | 54.22M |
Balance Sheet | |||||
| Total Assets | 3.17B | 2.74B | 2.19B | 1.89B | 1.29B |
| Cash, Cash Equivalents and Short-Term Investments | 156.09M | 324.76M | 347.39M | 462.44M | 299.80M |
| Total Debt | 410.16M | 277.84M | 138.84M | 146.72M | 113.57M |
| Total Liabilities | 1.13B | 948.74M | 636.34M | 581.92M | 408.83M |
| Stockholders Equity | 1.96B | 1.73B | 1.51B | 1.31B | 879.94M |
Cash Flow | |||||
| Free Cash Flow | 220.99M | 191.72M | 102.09M | 101.34M | 46.41M |
| Operating Cash Flow | 248.73M | 318.52M | 197.52M | 178.97M | 99.87M |
| Investing Cash Flow | -403.90M | -350.36M | -269.30M | -272.88M | -124.02M |
| Financing Cash Flow | -5.81M | 44.53M | -65.68M | 243.99M | 241.55M |
Globant SA Technical Analysis
Neutral
92.87
Price Trends
95.38
Negative
108.64
Negative
160.76
Negative
Market Momentum
-1.88
Negative
54.32
Neutral
87.98
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GLOB, the sentiment is Neutral. The current price of 92.87 is above the 20-day moving average (MA) of 88.68, below the 50-day MA of 95.38, and below the 200-day MA of 160.76, indicating a neutral trend. The MACD of -1.88 indicates Negative momentum. The RSI at 54.32 is Neutral, neither overbought nor oversold. The STOCH value of 87.98 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for GLOB.
Globant SA Risk Analysis
Globant SA disclosed 43 risk factors in its most recent earnings report. Globant SA reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Globant SA Peers Comparison
Overall Rating
UnderperformOutperform
Sector (50)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $37.82B | 16.15 | 16.61% | 1.59% | 4.09% | 14.05% | |
78 Outperform | $7.33B | 28.88 | 10.28% | 1.69% | 4.03% | 34.45% | |
75 Outperform | $74.61B | 22.87 | 30.46% | 2.92% | 4.52% | -0.22% | |
73 Outperform | $6.97B | 32.37 | 23.81% | ― | 14.18% | 21.49% | |
72 Outperform | $27.45B | 22.18 | 113.19% | ― | 5.99% | 59.74% | |
68 Neutral | $3.91B | 26.77 | 7.97% | ― | 11.90% | -11.15% | |
50 Neutral | C$3.09B | 2.52 | -63.12% | 2.26% | 4.49% | -6.07% |
* Technology Sector Average
Performance Comparison
GLOB
Globant SA
92.87
-100.85
-52.06%
CTSH
Cognizant
76.67
3.25
4.43%
DLB
Dolby Laboratories
76.36
-1.04
-1.34%
EXLS
Exlservice Holdings
42.86
8.36
24.23%
IT
Gartner
356.64
-114.20
-24.25%
INFY
Infosys
17.37
-4.75
-21.47%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.