Globant S.A. (GLOB) | Investment Case

1. Company Snapshot

1.a. Company Description

Globant S.A. operates as a technology services company worldwide.It offers e-commerce, new distribution capabilities, augmented revenue management, hyper connected operation, and conversational user experience services through reinvention studios; digital lending, commercial effectiveness, finance, sustainability, regulation analytic, transformation and post-merger integration, and payment and open banking services; and game and graphic engineering, UI and UX design, game as a service, DevOps, and online services, as well as high tech tools.The company also provides smart farming, image diagnosis, healthcare interoperability, genomics data processing, telemedicine and medical device, research and development, and precision medicine services; media and entertainment, and travel and hospitality services; cloud transformation advice, building cloud environment, moving workloads to the cloud, cloud support and operation, chaos engineering, and site reliability engineering services; and data strategies, insights, data platforms, MLOps, and data as a product services.

In addition, it offers agile delivery, blockchain, business and cultural hacking, conversational interface, cybersecurity, design, digital sales and marketing, enterprise applications, internet of thing, metaverse, process optimization, quality engineering, salesforce, smart venue, UI engineering, and sustainable business solutions.Further, the company provides smart underwriting, monitoring, and digital collection services; digital experience platforms; product strategy, management, and delivery services; and strategic architecture consulting, platforms evolution, and augmented composable solutions.Additionally, it operates augmented coding and testing, StarMeUp, PagoChat, ShopChat, and Walmeric platforms.

The company was formerly known as IT Outsourcing S.L. and changed its name to Globant S.A. in December 2012.Globant S.A. was founded in 2003 and is based in Luxembourg.

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1.b. Last Insights on GLOB

Globant S.A.'s recent performance was negatively impacted by concerns over growth and valuation. The company's rating was reiterated as "Hold" by brokerages, with one analyst assigning a sell recommendation and ten a hold recommendation. Despite a robust pipeline of over $3.5B and AI-first transformation, growth forecasts remain conservative. The upcoming Q4 2025 earnings release on February 26th, 2026, may provide insight into the company's financial health. Institutional investors, such as Diversified Trust Co, have recently purchased positions in the company.

1.c. Company Highlights

Last Price	45.82
Change Percentage	-0.04%
Open	45.26
Previous Close	45.84
Market Cap ( Millions)	2019
Volume	1220295
Year High	161.67
Year Low	44.51
M A 50	64.01
M A 200	74.05

FCF Yield	11.43%
Dividend Yield	0.00%
ROE	4.80%
Debt / Equity	21.81%
Net Debt / EBIDTA	98.54%
Price To Book	0.94
Price Earnings Ratio	20.44
Price To FCF	8.75
Price To sales	0.81
EV / EBITDA	7.22

2. Globant's Q3 2025 Earnings: A Strong Performance Driven by AI Growth

Globant reported revenue of $617.1 million, a 0.4% year-over-year increase and a 0.5% sequential growth, beating previous guidance expectations. The adjusted gross profit margin stood at 38.1%, flat relative to the previous quarter, while the adjusted operating margin reached 15.5%. Adjusted diluted EPS was $1.53, slightly below the estimated $1.54. The company's pipeline hit an all-time high of $3.7 billion, representing 30% year-over-year growth, driven by strong demand for its AI services.

Publication Date: Nov -15

                                    📋 Highlights
                                    Revenue Growth::
                                                Q3 revenue reached $617.1 million, reflecting 0.4% YoY and 0.5% sequential growth, surpassing guidance.
AI-Driven Momentum::
                                                Over 50% of projects are AI-related, with AI pipeline (900 projects) growing 30% YoY and AI pods doubling their pipeline share.
Margin Stability & Share Repurchases::
                                                Adjusted operating margin hit 15.5%, while $125 million share buyback program was authorized to enhance shareholder value.
2025 Guidance Confidence::
                                                Full-year revenue guidance of $2.447B (1.3% YoY growth) and $6.5B for 2025, with non-IFRS operating margin of at least 15%.
2026 Outlook Optimism::
                                                Anticipated growth in 2026 driven by 900 AI projects, improved pipeline conversion, and stabilization in professional services post-furloughs.

                                

AI-Driven Growth

Globant's AI studios and AI pods are driving growth, with the company seeing strong demand for its services. The AI pods, a new subscription model, have nearly doubled in their share of the pipeline. Over half of the company's projects are AI-related, and the pipeline for AI transformation projects has grown 30% year-over-year, with 900 projects currently in progress. The company's conversational interface is being adopted across various industries, including financial services, with applications in areas like fraud detection and portfolio management.

Business Optimization and Headcount

The company went through a business optimization plan to align headcount with business needs, given changes in industry studios and the subscription model. Headcount is expected to be flattish in Q4, with growth expected in 2026. Conversations with customers indicate more growth in 2026 than in 2025, and the company is optimistic about its prospects. The pricing environment is stable, with no pressure on pricing due to the value-added services provided by Globant.

Valuation and Outlook

With a P/E Ratio of 24.11 and an EV/EBITDA of 12.31, the market seems to be pricing in a moderate growth trajectory. Analysts estimate next year's revenue growth at 2.1%, which is slightly higher than the company's guidance. Given the company's strong pipeline and improving conversion rates, it is likely to drive growth in 2026. The company's focus on maintaining or improving margins and free cash generation is also positive. The Free Cash Flow Yield of 9.12% is attractive, indicating a potential upside.

Conclusion on Growth Prospects

The company's confidence in its 2026 outlook has increased, driven by a more positive market sentiment and a growing pipeline of projects. The conversion rate of pipeline projects into deals has improved, with a notable increase in large deals. With a robust pipeline and improving conversion rates, Globant is well-positioned for growth in 2026, driven by its AI solutions and subscription models.

3. NewsRoom

Globant (NYSE:GLOB) Shares Gap Down After Analyst Downgrade

Feb -20

Source: defenseworld.net

Globant to Announce Fourth Quarter 2025 Financial Results on February 26th

Feb -12

Source: prnewswire.com

This Forgotten AI Stock is Exactly What Long-Term Investors Want

Feb -05

Source: fool.com

Globant: Update For 2026 After Outperformance

Jan -28

Source: seekingalpha.com

Globant S.A. (NYSE:GLOB) Given Consensus Rating of “Hold” by Brokerages

Jan -04

Source: defenseworld.net

Diversified Trust Co Purchases New Position in Globant S.A. $GLOB

Jan -03

Source: defenseworld.net

Globant S.A. (NYSE:GLOB) Given Consensus Rating of “Hold” by Brokerages

Dec -10

Source: defenseworld.net

Globant's "Tech Trends" breaks down the 5 Forces that Will Power Enterprise Transformation in 2026

Dec -09

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (13.70%)

6. Segments

Media and Entertainment

Expected Growth: 13.5%

Globant S.A.'s Media and Entertainment segment growth of 13.5% is driven by increasing demand for digital transformation, cloud-based services, and cybersecurity solutions. The rise of streaming services, online gaming, and social media platforms also fuels growth. Additionally, the company's expertise in AI, AR, and VR technologies enables it to capitalize on emerging trends in the industry.

Banks, Financial Services and Insurance

Expected Growth: 13.8%

Globant S.A.'s 13.8% growth in Banks, Financial Services, and Insurance is driven by increasing demand for digital transformation, cloud adoption, and cybersecurity solutions. Additionally, the need for data analytics, AI-powered customer experience, and regulatory compliance are key growth catalysts. Furthermore, the rise of fintech and insurtech companies is also contributing to the segment's growth.

Consumer, Retail & Manufacturing

Expected Growth: 13.2%

Globant S.A.'s 13.2% growth in Consumer, Retail & Manufacturing is driven by increasing demand for digital transformation, e-commerce adoption, and supply chain optimization. Additionally, the rise of experiential retail, personalized customer experiences, and investments in data analytics and AI are key contributors to this growth.

Professional Services

Expected Growth: 14.2%

Globant's Professional Services segment growth of 14.2% is driven by increasing demand for digital transformation, cloud adoption, and nearshoring. Strong relationships with top-tier clients, expansion into new industries, and strategic acquisitions also contribute to growth. Additionally, the company's expertise in emerging technologies such as AI, blockchain, and cybersecurity further fuels growth.

Technology & Telecommunications

Expected Growth: 15.0%

Globant S.A.'s 15.0% growth in Technology & Telecommunications is driven by increasing demand for digital transformation, cloud adoption, and cybersecurity services. The company's expertise in AI, blockchain, and IoT solutions also contributes to its growth, as clients seek to stay competitive in a rapidly changing technology landscape.

Travel & Hospitality

Expected Growth: 12.8%

Globant S.A.'s Travel & Hospitality segment growth of 12.8% is driven by increasing demand for digital transformation, cloud-based solutions, and customer experience enhancement. The rise of online booking platforms, mobile apps, and social media has created opportunities for travel companies to invest in technology, fueling growth. Additionally, the need for personalized experiences, data analytics, and cybersecurity also contribute to the segment's expansion.

Health Care

Expected Growth: 13.5%

Globant S.A.'s 13.5% growth in Health Care is driven by increasing demand for digital transformation in the healthcare industry, fueled by the need for remote patient care, electronic health records, and data analytics. Additionally, the growing importance of personalized medicine, telemedicine, and healthcare IT outsourcing are contributing to this growth.

Other Verticals

Expected Growth: 13.0%

Globant's Other Verticals segment growth is driven by increasing demand for digital transformation services in industries such as healthcare, education, and tourism. The company's expertise in emerging technologies like AI, blockchain, and IoT, as well as its strong partnerships with leading companies, contribute to its 13.0% growth rate.

7. Detailed Products

Digital Studios

Globant's Digital Studios provide end-to-end digital transformation services, from strategy to implementation, to help clients achieve their digital goals.

Cloud Services

Globant's Cloud Services help clients migrate, manage, and optimize their cloud infrastructure, ensuring scalability, security, and cost-effectiveness.

Cybersecurity Services

Globant's Cybersecurity Services provide comprehensive security solutions to protect clients' digital assets from cyber threats, ensuring confidentiality, integrity, and availability.

Artificial Intelligence

Globant's Artificial Intelligence services help clients leverage AI and machine learning to automate processes, gain insights, and drive innovation.

Quality Engineering

Globant's Quality Engineering services ensure the quality and reliability of clients' software applications, using automation, testing, and continuous improvement.

Customer Experience

Globant's Customer Experience services help clients design and implement customer-centric solutions, enhancing engagement, loyalty, and revenue growth.

8. Globant S.A.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Globant S.A. operates in a niche market, providing IT services, which reduces the threat of substitutes. However, the increasing adoption of automation and AI could lead to the development of substitutes, posing a moderate threat.

Bargaining Power Of Customers

Globant S.A. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's expertise in IT services makes it difficult for customers to negotiate prices.

Bargaining Power Of Suppliers

Globant S.A. has a strong supply chain management system, which reduces the bargaining power of suppliers. The company's global presence also allows it to diversify its supplier base, reducing dependence on individual suppliers.

Threat Of New Entrants

The IT services market has high barriers to entry, including significant capital requirements and the need for specialized expertise. This reduces the threat of new entrants in the market.

Intensity Of Rivalry

The IT services market is highly competitive, with many established players competing for market share. Globant S.A. faces intense competition from companies like Accenture, IBM, and Infosys, which increases the intensity of rivalry.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	10.69%
Debt Cost	10.68%
Equity Weight	89.31%
Equity Cost	10.68%
WACC	10.68%
Leverage	11.97%

11. Quality Control: Globant S.A. passed 7 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Wise

A-Score: 5.4/10

Value: 4.9

Growth: 9.2

Quality: 8.0

Yield: 0.0

Momentum: 5.0

Volatility: 5.3

1-Year Total Return ->

Alten

A-Score: 4.9/10

Value: 7.3

Growth: 6.6

Quality: 5.7

Yield: 3.1

Momentum: 2.5

Volatility: 4.3

1-Year Total Return ->

Sopra Steria

A-Score: 4.8/10

Value: 7.4

Growth: 5.7

Quality: 5.3

Yield: 3.8

Momentum: 1.5

Volatility: 5.0

1-Year Total Return ->

Network International

A-Score: 3.6/10

Value: 1.3

Growth: 6.8

Quality: 6.4

Yield: 0.0

Momentum: 4.0

Volatility: 3.0

1-Year Total Return ->

Globant

A-Score: 3.4/10

Value: 5.1

Growth: 8.3

Quality: 5.7

Yield: 0.0

Momentum: 0.0

Volatility: 1.3

1-Year Total Return ->

Netcompany

A-Score: 3.2/10

Value: 1.9

Growth: 6.7

Quality: 4.0

Yield: 0.0

Momentum: 2.5

Volatility: 4.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-1.11%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

10.68%

Globant S.A. - LU0974299876

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on GLOB

1.c. Company Highlights

Higher Growth

Expensive

Average Yield

Revenues Miss

Medium Volatility

More Volatile

Stable Momentum

Earnings Miss

Weak Momentum

Revenues Beats

2. Globant's Q3 2025 Earnings: A Strong Performance Driven by AI Growth

AI-Driven Growth

Business Optimization and Headcount

Valuation and Outlook

Conclusion on Growth Prospects

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (13.70%)

6. Segments

Media and Entertainment

Expected Growth: 13.5%

Banks, Financial Services and Insurance

Expected Growth: 13.8%

Consumer, Retail & Manufacturing

Expected Growth: 13.2%

Professional Services

Expected Growth: 14.2%

Technology & Telecommunications

Expected Growth: 15.0%

Travel & Hospitality

Expected Growth: 12.8%

Health Care

Expected Growth: 13.5%

Other Verticals

Expected Growth: 13.0%

7. Detailed Products

Digital Studios

Cloud Services

Cybersecurity Services

Artificial Intelligence

Quality Engineering

Customer Experience

8. Globant S.A.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Globant S.A. passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

45.82$

12.e Scoring ^Insights

12.f DCF ^BETA