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On Friday, TD Cowen’s analyst, Bryan Bergin, adjusted the price target for Globant S.A. (NYSE: GLOB), a technology services company, reducing it to $125 from the previous $160. Despite the decrease, the firm maintained a Buy rating on the stock. Bergin’s assessment follows what he described as "Hits Keep Coming," referring to the company’s need to materially reset its guidance in the face of macroeconomic pressures and a strategy to de-risk. According to InvestingPro data, seven analysts have recently revised their earnings estimates downward, with the stock now trading at $98, significantly below its 52-week high of $238.32. The current analysis suggests Globant is undervalued based on InvestingPro’s Fair Value model.
The company experienced a challenging end to the first quarter, with volatility in Latin America and the B2B2C verticals leading to a revenue and earnings per share (EPS) miss of 2% and 5%, respectively. Despite these challenges, InvestingPro data shows the company maintains healthy financials with a current ratio of 1.56 and moderate debt levels. In response, Globant has adjusted its second quarter to fourth quarter outlook, adopting a more cautious stance. The revised forecast projects a 4% and 7% decrease in second-quarter revenue and EPS, respectively, and a 6% to 10% reduction for the full year 2025. For deeper insights into Globant’s financial health and future prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
Bergin noted that the cut in the price target was broadly anticipated by the market, although the extent of the adjustment was more significant than expected. Despite the after-hours trading pressure on Globant’s stock, the analyst believes the issues facing the company are more cyclical rather than structural, which may imply a temporary setback rather than a long-term decline.
Globant’s decision to flatten its outlook for the upcoming quarters was made to minimize future guidance risk. This conservative approach carries forward the stable behavior observed in April and May, with little assumption of conversion, resulting in revenue and EPS guidance that falls short of previous expectations for the second quarter and the calendar year 2025.
The price target adjustment by TD Cowen reflects the immediate challenges faced by Globant and the broader tech industry amid uncertain economic conditions. Despite the lowered expectations, the Buy rating suggests a continued positive long-term outlook for the company’s stock. InvestingPro data reveals that while the stock has experienced a significant 34.65% decline over the past six months, the company maintains strong profitability with a gross margin of 36.12% and positive earnings expectations for the current fiscal year.
In other recent news, Globant S.A. has faced a series of analyst adjustments following its first-quarter earnings report for 2025. The company revised its full-year revenue growth guidance downward, now expecting at least a 2% increase, a notable decrease from the prior midpoint expectation of 12%. This adjustment has been attributed to weaker performance in Latin America, particularly in Brazil and Mexico, and has led to a revision of estimates by several analyst firms. Mizuho (NYSE:MFG) Securities reduced Globant’s price target to $153, maintaining an Outperform rating, while Goldman Sachs shifted its rating from Buy to Neutral, lowering the price target to $120. Needham also decreased its price target to $115 but upheld a Buy rating, citing a widespread decline in demand. JPMorgan cut its price target to $108, maintaining an Overweight rating, and noted that Globant’s revised forecast implies no growth in constant currency organic terms. Piper Sandler downgraded Globant’s stock rating from Overweight to Neutral and reduced the price target to $116, highlighting macroeconomic challenges and specific difficulties in key markets. Despite these downgrades, some firms maintain a positive long-term outlook, pointing to Globant’s competitive edge and potential for future growth.
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