Globant SA (GLOB) AI Stock Analysis

• Market Cap: $4.04B
• Dividend Yield: N/A
• Average Volume (3M): 1.04M
• Price to Earnings (P/E): 26.4
• Beta (1Y): 1.33
• Revenue Growth: 11.90%
• EPS Growth: -11.15%
• Country: US
• Employees: 31,280
• Sector: Technology
• Sector Strength: 87
• Industry: Information Technology Services
• EPS (TTM): 1.50
• Shares Outstanding: 44,045,560
• 10 Day Avg. Volume: 1,184,077
• 30 Day Avg. Volume: 1,042,855
• PEG Ratio: -2.90
• Price to Book (P/B): 1.96
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 18.24
• Enterprise Value/Market Cap: 1.06
• Enterprise Value/Revenue: 0.45
• Enterprise Value/Gross Profit: 4.85
• Enterprise Value/Ebitda: 3.18
• 1Y Price Target: $124.77
• Price Target Upside: 36.03% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14

• Rating: 68 Neutral
• Price Target: $99.00 ▲(7.94%Upside)

Globant SA's strong financial performance and strategic investments are key strengths, but the current bearish technical indicators and macroeconomic challenges weigh on the overall score. The company's valuation is reasonable, but growth prospects are tempered by external risks.

Positive Factors

AI Innovation

Globant’s new AI-powered subscription model will enable clients to more easily reap tangible savings and efficiencies from AI, offering a consumption-based alternative to time-and-material and fixed priced contracts.

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

Client Spending

Clients across multiple verticals delayed projects and moderated spending levels because of the uncertain global trade environment.

Earnings and Financial Performance

Globant reported fiscal first-quarter results that came in weaker than consensus expectations for revenue and EPS.

Revenue Guidance

Globant cut its FY25 guidance targets across the board and below the Street.

Globant SA Business Overview & Revenue Model

Company Description

Globant 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 Money

Globant 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 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.

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.

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.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.46B	2.42B	2.10B	1.78B	1.30B	814.14M
Gross Profit	886.94M	863.37M	755.76M	669.39M	494.99M	304.33M
EBITDA	294.76M	405.14M	361.54M	317.25M	218.08M	135.43M
Net Income	153.24M	165.73M	158.54M	148.89M	96.06M	54.22M
Balance Sheet
Total Assets	3.24B	3.17B	2.74B	2.19B	1.89B	1.29B
Cash, Cash Equivalents and Short-Term Investments	127.58M	156.09M	324.76M	347.39M	462.44M	299.80M
Total Debt	402.11M	410.16M	277.84M	138.84M	146.72M	113.57M
Total Liabilities	1.12B	1.13B	948.74M	636.34M	581.92M	408.83M
Stockholders Equity	2.05B	1.96B	1.73B	1.51B	1.31B	879.94M
Cash Flow
Free Cash Flow	220.12M	220.99M	191.72M	102.09M	101.34M	46.41M
Operating Cash Flow	253.72M	248.73M	318.52M	197.52M	178.97M	99.87M
Investing Cash Flow	-413.47M	-403.90M	-350.36M	-269.30M	-272.88M	-124.02M
Financing Cash Flow	90.53M	-5.81M	44.53M	-65.68M	243.99M	241.55M

Globant SA Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 91.72
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GLOB, the sentiment is Negative. The current price of 91.72 is below the 20-day moving average (MA) of 93.93, below the 50-day MA of 105.86, and below the 200-day MA of 168.81, indicating a bearish trend. The MACD of -3.96 indicates Negative momentum. The RSI at 41.60 is Neutral, neither overbought nor oversold. The STOCH value of 67.87 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GLOB.

Globant SA Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
INFY	81 Outperform	$78.45B	24.85	29.00%	2.72%	3.85%	-0.38%
CTSH	78 Outperform	$39.92B	17.05	16.61%	1.53%	4.09%	14.05%
DLB	78 Outperform	$7.26B	28.59	10.28%	1.75%	4.03%	34.45%
IT	73 Outperform	$30.81B	24.90	113.19%	―	5.99%	59.74%
EXLS	72 Outperform	$7.37B	34.19	23.81%	―	14.18%	21.49%
GLOB	68 Neutral	$4.04B	26.44	7.97%	―	11.90%	-11.15%
Sector *	49 Neutral	C$2.96B	2.13	-80.92%	2.67%	12.55%	-24.47%