Globant SA Maintains Buy Rating with $85 Price Target Amid Strategic Shifts and Valuation Appeal

Globant SA maintains a Buy rating and $85 price target from Needham analyst Mayank Tandon, despite a downward adjustment to its revenue outlook due to demand challenges in North America. The company's strategic initiatives, including a business optimization plan and transition to a subscription-based model, are seen as positive. Valuation is considered appealing with a price-to-earnings multiple of 11 times fiscal year 2026 earnings per share estimate.

LUXEMBOURG, Aug. 14, 2025 /PRNewswire/ -- Globant (NYSE: GLOB) today announced its second-quarter 2025 financial results, highlighting growth and strategic initiatives despite a downward adjustment to its revenue outlook in North America. The company reported revenues of $614.2 million, an adjusted operating margin of 15.0%, and an adjusted diluted EPS of $1.53 [1].

Globant's CEO and co-founder, Martín Migoya, emphasized the company's alignment with its new business model, driven by AI Pods, subscription models, and AI Studios. "Our pipeline has reached an all-time high of $3.7 billion, reflecting strong demand for our differentiated offering," Migoya stated. The company's top customer, top five customers, and top ten customers accounted for 8.6%, 20.3%, and 29.3% of revenues, respectively, underscoring its strong customer base [1].

Despite a challenging environment in North America, Globant's revenue growth in Latin America and Europe offset the decline. The company's geographic revenue breakdown for the second quarter of 2025 was as follows: 54.1% from North America, 19.7% from Latin America, 19.6% from Europe, and 6.6% from New Markets [1].

Needham analyst Mayank Tandon maintains a Buy rating on Globant with an $85 price target, despite the downward revenue outlook. Tandon highlighted the company's strategic initiatives, including a business optimization plan and transition to a subscription-based model, as positive factors. The analyst also noted the appealing valuation, with a price-to-earnings multiple of 11 times the fiscal year 2026 earnings per share estimate [1].

Globant's CFO, Juan Urthiague, explained the company's approach to enhancing profitability and strategic resource allocation. "We delivered revenues of $614.2 million, an adjusted operating margin of 15.0%, and an adjusted diluted EPS of $1.53, reflecting both consistent execution and our ability to adapt in a dynamic market," Urthiague stated. The company's cash and cash equivalents and short-term investments stood at $174.2 million as of June 30, 2025 [1].

Looking ahead, Globant expects third-quarter 2025 revenues of at least $615.0 million and a non-IFRS adjusted profit from operations margin of at least 15.0%. For the full year 2025, the company anticipates revenues of at least $2,445.0 million and a non-IFRS adjusted profit from operations margin of at least 15.0% [1].

References:
[1] https://investors.globant.com/2025-08-14-Globant-Reports-2025-Second-Quarter-Financial-Results