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Globant recently announced its Q1 2025 earnings, reporting sales growth to USD 611 million yet a decline in net income and EPS from the previous year. Additionally, the company provided guidance for Q2, projecting 4.2% revenue growth with a neutral FX impact. Despite these reports, Globant's share price moved by 4% over the last month, contrasting with the broader market's uptick of 5.3% for the week. These earnings results and guidance details may have added weight to the stock's movement but contrasted the broader market's positive trajectory.
We've discovered 1 risk for Globant that you should be aware of before investing here.
Globant's recent earnings announcement, which highlighted sales growth accompanied by a reduction in net income and EPS, offers insight into the company's ongoing performance challenges and opportunities. Despite the company's projection of 4.2% revenue growth for Q2 2025, the market's reaction was mixed, as evidenced by a 4% movement in its share price amidst a broader market increase of 5.3%. This suggests that investors may be concerned about the company's ability to manage profitability amidst its expansion efforts and AI investments.
Over the past five years, Globant's total return, including share price and dividends, was a 25.93% decline, indicating challenges in sustaining shareholder value over the longer term. In the past year, Globant underperformed both the US market and the IT industry, which returned 11.9% and 29.7% respectively. This underperformance reflects the company's difficulty in aligning its growth strategies with market expectations.
The financial guidance and recent performance could impact future revenue and earnings forecasts, especially as Globant continues to focus on AI integration and global market expansion. Analysts forecast its revenue to reach $3.4 billion by 2028, with earnings potentially climbing to $309.1 million. The company's current share price of $119.55 sits below the consensus price target of $182.57, representing a significant upside potential if these forecasts are realized. However, achieving this will depend on its ability to mitigate risks such as political volatility and client dependency.
Understand Globant's track record by examining our performance history report.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.