Globant SA (GLOB) AI Stock Analysis

972 Followers

Top Page

Globant SA

(NYSE:GLOB)

68Neutral

Globant SA's overall score reflects strong financial performance and positive earnings call insights, particularly with growth in AI-related projects and market expansion. However, technical analysis indicates bearish momentum, and the high P/E ratio suggests the stock is relatively expensive. While the company has a strong foundation and growth prospects, potential investors should be cautious of the current negative technical indicators.

Positive Factors

Client Relationships

GLOB continues to demonstrate the strength and differentiation of its customer relationships and Studio model, allowing it to drive double-digit growth in the medium term.

Financial Performance

GLOB remains the fastest growing company in the coverage on an organic basis.

Growth Opportunities

GLOB's strong capabilities around AI/GenAI are supplementing growth with significant revenue more than doubling year-over-year.

Negative Factors

Economic Uncertainty

Increased economic uncertainty is delaying client decision-making, particularly in LATAM.

Guidance and Expectations

The initial 2025 organic CC growth guidance of +9.5% fell short of investors' expectation of low double-digits.

Revenue Growth

A pull-forward of revenue at GLOB's largest client is pressuring near-term growth.

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

Market Cap

$4.43B

Dividend YieldN/A

Average Volume (3M)1.10M

Price to Earnings (P/E)26.9

Beta (1Y)1.80

Revenue Growth15.26%

EPS Growth2.66%

CountryUS

Employees31,280

SectorTechnology

Sector Strength40

IndustryInformation Technology Services

Share Statistics

EPS (TTM)3.82

Shares Outstanding44,045,560

10 Day Avg. Volume1,090,560

30 Day Avg. Volume1,102,713

Financial Highlights & Ratios

PEG Ratio10.09

Price to Book (P/B)N/A

Price to Sales (P/S)2.38

Price to Cash Flow (P/CF)N/A

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$212.31

Price Target Upside106.91% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering14

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 makes money primarily through its technology services and consulting offerings. The company generates revenue by providing tailored software development and IT services to a wide range of industries, helping businesses embrace digital transformation. Key revenue streams include project-based engagements where Globant designs, builds, and manages software solutions, as well as ongoing support and consulting services. The company often enters into long-term partnerships with its clients, enabling sustained income through continuous project work and strategic advisory roles. Globant's ability to innovate and deliver cutting-edge technology solutions, such as artificial intelligence and machine learning, further enhances its appeal to businesses looking to modernize their operations. Additionally, the company's geographical diversity and strong presence in emerging markets contribute to its earnings potential.

Globant SA Financial Statement Overview

Summary

Globant SA exhibits strong financial health characterized by consistent revenue and profit growth, solid margins, and effective cash flow management. The balance sheet reflects a prudent leverage strategy, although rising debt levels should be monitored. Overall, the company demonstrates sound financial management and operational efficiency, positioning it well within the software industry.

Income Statement

Very Positive

Globant SA has shown consistent revenue growth over the years, with a strong increase from $814 million in 2020 to $2.42 billion in 2024. Gross profit margin has been stable, with the latest figure at 36.26%, indicating efficient cost management. The net profit margin has slightly improved to 6.86% in 2024, reflecting good profitability. EBIT and EBITDA margins have also shown steady improvement, demonstrating operational efficiency.

Balance Sheet

Positive

The company's debt-to-equity ratio remains manageable at 0.21, indicating a conservative leverage approach, while the equity ratio is strong at 61.99%, reflecting a solid equity base. The return on equity (ROE) is healthy at 8.44%, showcasing effective utilization of equity. However, the increase in total debt over the years warrants monitoring.

Cash Flow

Positive

Globant SA has demonstrated strong free cash flow growth, with a recent increase to $220.99 million in 2024. The operating cash flow to net income ratio is robust at 1.50, indicating a strong cash-generating ability relative to profits. Similarly, the free cash flow to net income ratio of 1.33 underscores the company's capability to convert profit into cash efficiently.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
2.42B	2.10B	1.78B	1.30B	814.14M
	Gross Profit
875.93M	755.76M	669.39M	494.99M	304.33M
	EBIT
225.42M	198.96M	107.87M	64.83M	41.55M
	EBITDA
372.81M	361.54M	317.25M	218.08M	135.43M
	Net Income Common Stockholders
165.73M	158.54M	148.89M	96.06M	54.22M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
156.09M	324.76M	347.39M	462.44M	299.80M
	Total Assets
3.17B	2.74B	2.19B	1.89B	1.29B
	Total Debt
410.16M	277.84M	138.84M	146.72M	113.57M
	Net Debt
268.07M	-29.38M	-153.62M	-281.08M	-165.37M
	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

Technical Analysis Sentiment

Negative

Last Price102.61

Price Trends

50DMA

162.48

Negative

100DMA

190.88

Negative

200DMA

194.29

Negative

Market Momentum

MACD

-13.82

Negative

RSI

20.39

Positive

STOCH

9.59

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 102.61 is below the 20-day moving average (MA) of 124.34, below the 50-day MA of 162.48, and below the 200-day MA of 194.29, indicating a bearish trend. The MACD of -13.82 indicates Negative momentum. The RSI at 20.39 is Positive, neither overbought nor oversold. The STOCH value of 9.59 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 (57)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EXLS	79 Outperform	$6.96B	35.37	21.80%	―	12.74%	9.92%
IT	75 Outperform	$29.44B	23.90	122.93%	―	6.10%	44.57%
INFY	75 Outperform	$70.20B	20.77	33.16%	2.50%	3.08%	11.92%
CTSH	72 Outperform	$34.00B	15.25	16.21%	1.76%	1.98%	7.16%
DLB	72 Outperform	$6.99B	26.74	10.82%	1.74%	2.71%	39.56%
GLOB	68 Neutral	$4.43B	26.87	8.97%	―	15.26%	2.66%
Sector *	57 Neutral	$18.52B	9.81	-13.96%	2.71%	5.07%	-23.65%

* Technology Sector Average

Performance Comparison

GLOB

Globant SA

102.61

-94.29

-47.89%

CTSH

Cognizant

67.38

-2.58

-3.69%

DLB

Dolby Laboratories

70.06

-11.80

-14.41%

EXLS

Exlservice Holdings

42.23

12.27

40.95%

Gartner

382.57

-89.30

-18.92%

INFY

Infosys

16.78

-0.59

-3.40%

Globant SA Earnings Call Summary

Earnings Call Date: Feb 20, 2025 | % Change Since: -51.18% | Next Earnings Date: May 15, 2025

Earnings Call Sentiment Positive

Globant's earnings call highlights strong growth in AI-related revenue, expansion in new markets, and a robust pipeline. However, there are challenges in Latin America due to political factors and expected revenue impact from the top client. Overall, growth and positive developments outweigh the challenges.

Highlights

AI-Related Revenue Growth

AI-related projects contributed over $350 million to Globant's revenue in 2024, marking a 110% increase from 2023.

Record Annual Revenue

Globant's annual revenue reached $2.4 billion, up 15.3% over the previous year.

Expansion of Client Base

Globant now has 20 clients generating over $20 million in annual revenue, up from 16 clients the previous year.

Regional Growth

Significant growth in new markets, with revenue in the Middle East and Asia Pacific increasing by 43.8% quarter-over-quarter and 89% year-over-year.

Strong Pipeline

Globant's pipeline grew from $2.6 billion to $3.3 billion by the end of 2024, indicating strong future growth potential.

Adjusted Operating Margin Improvement

Adjusted operating margin increased to 15.7%, the highest in the past 8 quarters.

Employee Growth and Training

Total headcount increased to 31,280, a 7.3% increase over last year, with a strong focus on AI training for employees.

Lowlights

Latin America Revenue Decline

Revenue in Latin America showed a 1.3% decline, though it experienced a 6.3% growth in constant currency terms.

Impact of Political and Macroeconomic Conditions

Recent political and macroeconomic volatility affected demand in Latin America, specifically in Mexico and Brazil.

Top Client Revenue Impact

Revenue from the top client, the Walt Disney Company, is expected to be slightly down in Q1 2025 after a strong investment phase in H2 2024.

Pricing Challenges

The pricing market remains challenging with neutral to low single-digit price increases.

Company Guidance

During Globant's Fourth Quarter and Full Year 2024 Earnings Conference Call, the company reported robust financial performance, with annual revenue reaching $2.4 billion, reflecting a 15.3% increase over the previous year. Notably, AI-related projects contributed over $350 million to revenue, marking a 110% growth from 2023. The adjusted operating profit improved by 20 basis points, and the adjusted diluted EPS grew by 11.5% to $6.40. In Q4, total revenue was $642.5 million, showing a 10.6% year-over-year increase and a 4.5% quarter-over-quarter rise. Additionally, the company celebrated a 28.3% compound annual growth rate since its public listing in 2014. Looking forward to 2025, Globant provided guidance of $2.635 billion to $2.75 billion in revenue, a 9.1% to 12% increase, or a 10.6% to 13.5% increase in constant currency, and projected an adjusted EPS between $6.80 to $7.20.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.