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On Friday, Needham analysts adjusted their outlook on Globant S.A. (NYSE: GLOB), reducing the price target to $220 from the previous $265, while still holding a Buy rating on the shares. The revision followed the company’s fourth-quarter earnings report for 2024, which presented mixed results. The $9.1 billion market cap company reported revenue of $2.4 billion with 15.26% growth year-over-year, though falling short of expectations due to foreign exchange headwinds. Despite challenges, earnings per share outperformed due to favorable items below the line.
The company’s guidance for the first quarter and the full year of 2025 was weaker than anticipated, taking into account continued foreign exchange challenges, reduced spending by a major client, Disney (NYSE:DIS), and the political and economic uncertainties in Latin America. According to InvestingPro data, six analysts have recently revised their earnings estimates downward, though the stock currently appears undervalued based on InvestingPro’s Fair Value analysis. Despite these immediate hurdles, Needham analysts believe that the issues are cyclical and temporary, with the potential for management to navigate through them as the year progresses.
The analysts’ optimism is underpinned by Globant’s consistent performance in expanding its customer base, securing new clients, and increasing market share. With a healthy gross profit margin of 35.74% and strong revenue CAGR of 32% over the past five years, the company maintains solid fundamentals. Furthermore, the growing adoption of Generative AI (GenAI) technology is expected to provide additional growth opportunities for the company. For deeper insights into Globant’s financial health and growth prospects, InvestingPro subscribers can access comprehensive analysis and additional ProTips.
Needham’s reiteration of a Buy rating indicates confidence in Globant’s ability to capitalize on these opportunities. The new price target of $220 reflects the near-term growth challenges but also suggests a positive outlook for the stock in the longer term.
Investors and market watchers will be keeping an eye on Globant’s strategic moves and market performance as the company works to address the factors impacting its short-term guidance and strives to leverage emerging technologies for growth.
In other recent news, Globant S.A. reported its fourth-quarter earnings, with adjusted earnings per share reaching $1.75, slightly above analyst expectations of $1.73. The company’s revenue increased by 10.6% year-over-year to $642.5 million, though it fell short of the consensus forecast of $645.44 million. However, Globant’s guidance for the first quarter and full year of 2025 disappointed investors, projecting lower-than-expected earnings and revenue figures. The company forecasts first-quarter adjusted EPS of $1.55-$1.63 on revenue of $618-628 million, compared to analyst estimates of $1.65 EPS and $637 million in revenue.
For the full year 2025, Globant projects adjusted EPS of $6.80-$7.20 on revenue of $2.635-2.705 billion, below analyst expectations of $7.34 EPS and $2.746 billion in revenue. Following this, Mizuho (NYSE:MFG) Securities adjusted its price target for Globant to $235, maintaining an Outperform rating, while TD Cowen reduced its target to $245, keeping a Buy rating. JPMorgan also lowered its price target to $242 but retained an Overweight rating, citing concerns over the company’s revenue outlook and market challenges in Latin America. Despite these adjustments, analysts remain optimistic about Globant’s long-term growth potential, pointing to its competitive position and anticipated project developments in the Middle East.
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