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On Tuesday, TD Cowen updated its stance on shares of Globant S.A. (NYSE: GLOB), raising the price target to $270 from the previous $240, while reiterating a Buy rating on the stock.
The firm also highlighted Globant as a Best Idea for 2025, signaling strong confidence in the company's prospects. According to InvestingPro data, six analysts have recently revised their earnings estimates upward for the upcoming period, with current analyst targets ranging from $140 to $284.
The analyst praised Globant for its consistent organic growth, attributing it to unique factors that are likely to continue. Despite recent underperformance in share price relative to the market, the analyst expects a correction as the company’s distinct advantages become increasingly evident to investors.
TD Cowen's analysis suggested that compared to historical averages, Globant's market premium is currently lower than usual. With a current P/E ratio of 58.55 and a market capitalization of $9.82 billion, InvestingPro's Fair Value analysis suggests the stock is currently fairly valued.
The company's clear differentiation in the market is expected to lead to a self-adjustment in its valuation. For deeper insights into Globant's valuation metrics and growth potential, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
Globant's outlook for early 2025 was also a point of optimism, with the analyst indicating potential for upward revisions in estimates. The company is seen as a prime candidate for investors seeking to capitalize on improvements within the Services sector.
The endorsement of Globant as a Best Idea for 2025 by TD Cowen reflects a bullish view on the company's ability to outperform within its industry, driven by its unique growth factors and potential for valuation adjustments.
In other recent news, Globant has seen significant developments in its financial performance and strategic growth. Needham, and CFRA have all raised their price targets on Globant based on the company's strong growth outlook.
Globant's recent earnings report revealed a third-quarter revenue of $615 million, a 13% year-over-year increase, and earnings per share (EPS) of $1.63, up 10% from the previous year. In addition, Globant's business with Disney (NYSE:DIS), its top client, grew by 18% year-over-year, and sales related to artificial intelligence (AI) surged by 120% year-over-year to exceed $250 million, indicating a successful focus on AI.
The company's global expansion strategy includes significant projects in the Middle East and new offices in Europe, with a growing workforce nearing 30,000 employees. Looking ahead, Globant projects Q4 revenues between $642 million and $648 million, and an adjusted EPS anticipated between $1.71 to $1.75. The company also anticipates organic growth acceleration in 2025, with mergers and acquisitions contributing an additional 2%-3%.
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