UBS Downgrades Globant to Neutral, Cuts Price Target to $75

UBS Downgrades Globant to Neutral, Cuts Price Target to $75

UBS Group AG has downgraded Globant S.A. (GLOB) to a 'Neutral' rating and slashed its price target to $75. The Swiss bank cited weaker-than-expected revenue guidance for fiscal 2025 and mounting uncertainty in the company’s growth outlook as the primary reasons for the downgrade [2].

The move comes in the wake of Globant’s second-quarter (Q2) earnings update, which signaled a slower growth trajectory ahead. The firm noted that the revenue projections create a more difficult environment for achieving positive growth by fiscal 2026. Globant lowered its FY2025 revenue outlook to at least $2.445 billion, from $2.464 billion earlier, in line with the consensus estimate [2].

The company's stock tumbled over 14% on Friday mid-morning, despite retail sentiment around the stock remaining in 'extremely bullish' territory and message volume improving to 'extremely high' levels in 24 hours [2].

Goldman Sachs, which maintained its Neutral rating and $105.00 price target on Globant, acknowledged that the company’s competitive technology advantage remains intact, but noted that it may take several quarters before the markets and clients to which Globant is most heavily exposed return to a favorable growth profile [1].

Despite these challenges, Globant reported its second-quarter earnings, which slightly surpassed analyst expectations. The company posted adjusted earnings per share of $1.53, just above the consensus estimate of $1.51. Revenue for the quarter was $614.2 million, slightly exceeding the expected $612.54 million, marking a 4.5% year-over-year increase [1].

The recent guidance has raised questions about the company’s future performance, as analysts and investors assess the implications of the lower-than-expected projections. The company’s outlook appeared to be the primary focus, overshadowing the modest earnings beats [1].

Globant S.A. stock has lost over 68% year-to-date and over 65% in the last 12 months. The company maintains healthy profitability with a diluted EPS of $3.38 and operates with moderate debt levels [1].

References:
[1] https://www.investing.com/news/analyst-ratings/goldman-sachs-reiterates-neutral-rating-on-globant-stock-amid-revenue-guidance-cut-93CH-4194778
[2] https://stocktwits.com/news-articles/markets/equity/globant-stock-tumbled-14-percent/chsPuWDRdfq