Globant SA (GLOB) AI Stock Analysis

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Globant SA

(NYSE:GLOB)

Rating:69Neutral

Price Target:

$77.00

▲(21.99% Upside)

Globant SA's overall stock score reflects a strong earnings call performance and solid financial health, offset by bearish technical indicators and a high valuation. The company's strategic initiatives in AI and partnerships are promising, but current market conditions and valuation concerns weigh on the stock's attractiveness.

Positive Factors

Latin America Recovery

Latin America showed strong signs of a recovery, achieving record bookings and returning to sequential revenue growth after several weak quarters, with strong performance in Argentina and stabilization in Brazil and Mexico.

Pipeline Growth

Pipeline growth accelerated to 25% year-over-year, reaching an all-time high, with the majority of the sequential build attributed to traction with the new AI pricing model.

Value for Investors

Shares expected to open at a P/E multiple of ~11x our FY26 EPS estimate, believed to be attractive for value investors.

Negative Factors

Demand Weakness

Guidance was lower due to ongoing demand weakness.

Downward Guidance Revision

Fiscal 2025 guidance was revised downward for the second straight quarter to at least 1.2% revenue growth to $2,445 million as one professional services customer and a few in technology are ramping up slower than expected.

Project Delays

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

Globant SA (GLOB) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$2.75B

Dividend YieldN/A

Average Volume (3M)1.80M

Price to Earnings (P/E)24.7

Beta (1Y)1.39

Revenue Growth8.66%

EPS Growth-35.78%

CountryUS

Employees31,280

SectorTechnology

Sector Strength83

IndustryInformation Technology Services

Share Statistics

EPS (TTM)1.53

Shares Outstanding44,045,560

10 Day Avg. Volume1,301,116

30 Day Avg. Volume1,803,681

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)N/A

P/FCF RatioN/A

Enterprise Value/Market Cap1.62

Enterprise Value/Revenue1.79

Enterprise Value/Gross Profit4.98

Enterprise Value/Ebitda17.93

Forecast

1Y Price Target

$90.18

Price Target Upside42.87% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering12

Globant SA Business Overview & Revenue Model

Company DescriptionGlobant SA (GLOB) is a technology services company that specializes in software development, IT services, and digital transformation. Founded in 2003 and headquartered in Luxembourg, Globant operates across various sectors, including finance, healthcare, travel, and entertainment. The company focuses on providing a range of services such as application development, cloud computing, artificial intelligence, and user experience design, catering to both large enterprises and innovative startups.

How the Company Makes MoneyGlobant generates revenue primarily through its consulting and professional services. The company employs a model that combines project-based work with long-term service contracts, enabling it to deliver tailored technology solutions to its clients. Key revenue streams include custom software development, system integration, and IT outsourcing services. Additionally, Globant has established partnerships with major technology companies, such as Google, IBM, and Salesforce, which not only enhance its service offerings but also contribute to its earnings through collaborative projects and joint initiatives. The company's focus on emerging technologies and digital transformation services positions it well in a growing market, helping to drive consistent revenue growth.

Globant SA Earnings Call Summary

Earnings Call Date:Aug 14, 2025

(Q2-2025)

% Change Since: |

Next Earnings Date:Nov 13, 2025

Earnings Call Sentiment Neutral

Globant's earnings call highlighted strong growth in revenue, pipeline, and client base, driven by strategic initiatives in AI and partnerships with major tech companies. However, challenges such as workforce reduction, negative free cash flow, and revenue decline in North America due to macroeconomic factors were also noted.

Q2-2025 Updates

Positive Updates

Revenue Growth

Globant delivered revenue of $614.2 million in Q2 2025, representing 4.5% year-over-year growth.

Record Pipeline

The pipeline is at an all-time high of $3.7 billion, up 25% from last year.

AI Pods Adoption

Globant's AI pods have attracted 18 clients within the first quarter of its launch, contributing significantly to pipeline growth.

Strategic Partnerships

Globant announced a multiyear collaboration with OpenAI and a strategic collaboration agreement with Amazon Web Services.

Regional Revenue Diversification

North America is the largest market with 54.1% of revenue. Europe grew 8.1% sequentially, and new markets grew 84% year-over-year.

Client Base Growth

49 clients generate more than $10 million annually, up from 39 a year ago. 339 clients generate over $1 million annually, up from 329 last year.

AI Platform Impact

Organizations using Globant Enterprise AI reported an 80% reduction in legacy systems modernization times and a 50% increase in software development costs.

Negative Updates

Workforce Reduction

Globant reduced its workforce by approximately 1,000 employees or 3% to align skills with strategic priorities.

Free Cash Flow Challenges

Free cash flow for the quarter was negative $2.9 million compared to negative $28 million from the same period last year.

North America Revenue Decline

Sequential revenue in North America was down 2%, impacted by a customer in professional services and some small customers in technology.

Macroeconomic Uncertainty

The macro environment has extended sales cycles, necessitating a conservative outlook for the second half of the year.

Company Guidance

During Globant's Second Quarter 2025 Earnings Conference Call, the company provided a detailed financial outlook, highlighting a revenue of $614.2 million, which marks a 4.5% year-over-year growth. Their pipeline reached an all-time high of $3.7 billion, a 25% increase from the previous year. The non-IFRS adjusted operating margin was reported at 15%, with a non-IFRS adjusted diluted EPS of $1.53. The company executed a business optimization plan, which included a workforce reduction of approximately 1,000 employees, resulting in a one-time charge of $47.6 million but expected to generate $80 million in annualized savings. For the third quarter of 2025, Globant anticipates revenue of at least $615 million and an adjusted operating margin of at least 15%. The full-year 2025 revenue is projected to be at least $2.445 billion, with an adjusted diluted EPS of at least $6.12. The company emphasized the strategic importance of their AI initiatives, noting that 18 clients have already adopted their new AI Pods subscription model, contributing significantly to pipeline growth. Additionally, Globant is leveraging its AI capabilities through partnerships with major companies like OpenAI and AWS, further bolstering its position in the AI-driven market.

Globant SA Financial Statement Overview

Summary

Globant SA shows strong growth and a solid financial position, supported by robust revenue increases and a healthy balance sheet. While profitability margins have faced some pressure, the company's low leverage and strong equity base provide stability. Cash flow generation is positive, though there is room for improvement in converting earnings to free cash flow.

Income Statement

Positive

Globant SA demonstrates strong revenue growth with a TTM increase of 8.8%, indicating robust demand for its services. The gross profit margin remains stable at around 36%, reflecting efficient cost management. However, the net profit margin has slightly decreased to 6.2% in the TTM, suggesting some pressure on profitability. EBIT and EBITDA margins have also seen a decline, indicating potential challenges in operational efficiency.

Balance Sheet

Very Positive

The company maintains a healthy balance sheet with a low debt-to-equity ratio of 0.20, indicating conservative leverage. The return on equity is moderate at 7.98%, showing decent profitability relative to shareholder equity. The equity ratio stands at 62.4%, reflecting a strong capital structure with significant equity financing.

Cash Flow

Positive

Globant SA's cash flow performance is solid, with a free cash flow growth rate of 11.4% in the TTM, highlighting effective cash generation. The operating cash flow to net income ratio is 0.45, suggesting good cash conversion from earnings. However, the free cash flow to net income ratio of 0.87 indicates that a significant portion of earnings is not translating into free cash flow, which could be a concern for liquidity.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.48B	2.42B	2.10B	1.78B	1.30B	814.14M
Gross Profit	895.03M	863.37M	755.76M	669.39M	494.99M	304.33M
EBITDA	248.56M	405.14M	361.54M	317.25M	218.08M	135.43M
Net Income	112.20M	165.73M	158.54M	148.89M	96.06M	54.22M
Balance Sheet
Total Assets	3.40B	3.17B	2.74B	2.19B	1.89B	1.29B
Cash, Cash Equivalents and Short-Term Investments	184.13M	158.24M	324.76M	347.39M	462.44M	299.80M
Total Debt	536.65M	410.16M	277.84M	138.84M	146.72M	113.57M
Total Liabilities	1.21B	1.13B	948.74M	636.34M	581.92M	408.83M
Stockholders Equity	2.12B	1.96B	1.73B	1.51B	1.31B	879.94M
Cash Flow
Free Cash Flow	245.25M	220.99M	191.72M	102.09M	101.34M	46.41M
Operating Cash Flow	265.43M	248.73M	318.52M	197.52M	178.97M	99.87M
Investing Cash Flow	-421.58M	-403.90M	-350.36M	-269.30M	-272.88M	-124.02M
Financing Cash Flow	211.80M	-5.81M	44.53M	-65.68M	243.99M	241.55M

Globant SA Technical Analysis

Technical Analysis Sentiment

Negative

Last Price63.12

Price Trends

50DMA

80.08

Negative

100DMA

93.86

Negative

200DMA

139.82

Negative

Market Momentum

MACD

-5.02

Positive

RSI

29.98

Positive

STOCH

13.05

Positive

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 63.12 is below the 20-day moving average (MA) of 69.14, below the 50-day MA of 80.08, and below the 200-day MA of 139.82, indicating a bearish trend. The MACD of -5.02 indicates Positive momentum. The RSI at 29.98 is Positive, neither overbought nor oversold. The STOCH value of 13.05 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WNS	76 Outperform	$3.23B	20.11	21.23%	―	1.94%	26.15%
ASGN	71 Outperform	$2.30B	16.65	7.71%	―	-6.31%	-23.56%
DXC	71 Outperform	$2.60B	7.07	12.60%	―	-4.93%	497.03%
CNXC	71 Outperform	$3.31B	14.27	5.59%	2.54%	11.31%	-16.02%
GLOB	69 Neutral	$2.75B	24.73	5.66%	―	8.66%	-35.78%
Sector *	61 Neutral	$35.52B	8.84	-11.04%	1.87%	8.55%	-8.14%
CLVT	58 Neutral	$2.86B	―	-8.18%	―	-3.92%	67.52%

* Technology Sector Average

Performance Comparison

GLOB

Globant SA

63.12

-131.85

-67.63%

ASGN

53.07

-36.67

-40.86%

WNS

75.40

18.51

32.54%

DXC

DXC Technology

14.79

-6.03

-28.96%

CLVT

Clarivate

4.40

-2.27

-34.03%

CNXC

Concentrix

53.82

-17.03

-24.04%

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.Date of analysis: Aug 25, 2025