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On Friday, TD Cowen maintained a Buy rating on Globant S.A. (NYSE: GLOB) while reducing the price target from $270.00 to $245.00. Currently trading at $210.17, the technology services company faces a consecutive growth reset, influenced by incremental softness in its financial forecasts. According to InvestingPro data, six analysts have recently revised their earnings estimates downward for the upcoming period.
Globant has been recognized for its strong organic growth within the Services sector, maintaining a robust 15.26% revenue growth over the last twelve months. While expectations for the future remain positive, the revised outlook for the first quarter of calendar year 2025 suggests a slight downturn, with revenue projections down by 2-3% and earnings per share (EPS) estimates lowered by 4-5%. The company currently trades at a P/E ratio of 54x, reflecting high growth expectations despite recent challenges.
The updated analysis from TD Cowen reflects concerns over recent developments in Latin America and changes in Disney (NYSE:DIS) programs, which have contributed to the less optimistic growth recovery for Globant. Despite robust performance in the fourth quarter, the anticipated growth for 2025 has been moderated.
The report emphasizes that while Globant continues to show some of the strongest organic growth in its sector, investors may need to exercise patience as the company navigates through the current challenges. The new price target of $245.00 takes into account these factors, suggesting a more cautious short-term outlook for the company’s financial performance.
In summary, TD Cowen’s latest evaluation of Globant underscores the necessity for a tempered approach to the company’s growth trajectory, acknowledging both its historical strengths and the recent softness affecting its market outlook. InvestingPro analysis indicates a GOOD overall financial health score, suggesting fundamental stability despite near-term headwinds. For deeper insights into Globant’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, Globant S.A. reported its fourth-quarter earnings, surpassing analyst expectations with an adjusted earnings per share of $1.75 against the anticipated $1.73. The company achieved a 10.6% year-over-year revenue increase to $642.5 million, although this was slightly below the consensus forecast of $645.44 million. However, the company’s guidance for the first quarter and full year of 2025 fell short of Wall Street expectations, with projected revenue and earnings per share lower than analysts had anticipated. For the first quarter, Globant expects adjusted earnings per share between $1.55 and $1.63 on revenue of $618 to $628 million, compared to analyst estimates of $1.65 EPS and $637 million in revenue.
The full-year 2025 guidance also disappointed, with forecasts of adjusted EPS ranging from $6.80 to $7.20 on revenue between $2.635 billion and $2.705 billion, below analyst expectations of $7.34 EPS and $2.746 billion in revenue. Following these announcements, JPMorgan revised its price target for Globant to $242 from $248, maintaining an Overweight rating on the stock. Despite the lower guidance, the company noted significant growth in its pipeline, although there has been no acceleration in conversion and delivery. Management remains optimistic about maintaining momentum, citing record revenue achievements in the past quarter.
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