Last Update 18 Dec 25

Fair value Decreased 31%

GLOB Will See AI And FIFA Wins Drive Long-Term Rebound

The analyst price target for Globant has been cut significantly to align with a lower fair value estimate of about $124 from roughly $180, as analysts factor in slower organic revenue growth, lingering demand and structural IT services headwinds, and a reset to more moderate future earnings multiples, despite slightly better margin expectations.

Analyst Commentary

Recent Street research reflects a cautious but not uniformly negative stance on Globant, with most firms converging around a more modest growth and valuation framework. Target prices have been reset lower to reflect slower organic growth, exposure to softer end markets, and sector wide IT services headwinds. This reinforces the view that a sustained reacceleration is more likely a multi year story rather than an imminent catalyst.

Several research notes underscore that industry trends are unlikely to materially improve in the near term, and that Globant's transition to a new business model could temporarily weigh on execution and visibility. Neutral and Hold ratings dominate recent commentary, signaling that many observers prefer to stay on the sidelines until there is clearer evidence of a bottom in revenue growth and a more durable demand recovery.

At the same time, analysts generally acknowledge that sentiment across the sector has already reset lower, with expectations now better aligned to a more challenging macro and structural backdrop. As a result, current valuations are increasingly being framed as reflecting a transition phase rather than implying a permanent impairment to Globant's long term earnings power, particularly if management can deliver on its pipeline and AI related initiatives.

Bullish Takeaways

Bullish analysts highlight that, despite near term pressure, Globant's Q3 results and outlook were broadly in line with expectations, supporting the view that execution remains disciplined even in a weak IT spending environment.
Some see the company's healthy pipeline and bookings as underpinning a gradual reacceleration in growth from FY26 onward, especially as AI projects move from proof of concept into full production, which could justify a higher earnings multiple over time.
Where Buy ratings are maintained, targets in the $80 range are framed as reflecting upside from current levels if management can convert its AI and digital transformation opportunities into sustained double digit organic growth.
Bullish analysts also argue that as revenue growth approaches a trough and sector demand stabilizes, sentiment could shift positively, allowing Globant's valuation to rerate closer to its historical premium if margin discipline is preserved.

What's in the News

FIFA expanded its multi year agreement with Globant, naming the company a Tournament Supporter for the FIFA World Cup 2026 and FIFA Women's World Cup 2027, and tasking it with enhancing FIFA's digital platforms and developing a new fan engagement app across multiple tournaments (Key Developments).
Globant issued 2025 guidance calling for at least $2.45 billion in revenue, implying low single digit year over year growth and a slight decline in fourth quarter 2025. This underscores the muted demand backdrop already reflected in lowered price targets (Key Developments).
YPF and Globant launched Digital Suppl.AI, an agentic AI platform built under Globant's AI Pods model to automate and modernize YPF's supply chain, targeting cost optimization and productivity gains across procurement and inventory management (Key Developments).
Globant deepened its cloud and AI positioning through a new multi year strategic collaboration with Amazon Web Services. This builds on its AWS Studio and recent Premier Tier and Managed Security Services Provider competencies to deliver sector specific digital transformation solutions (Key Developments).
The Board authorized a share repurchase program of up to $125 million through the fourth quarter of 2026, signaling confidence in long term value creation despite near term growth headwinds (Key Developments).

Valuation Changes

The Fair Value Estimate has fallen significantly, reduced from about $180.01 to approximately $124.16 per share.
The Discount Rate has risen slightly, moving from roughly 8.86 percent to about 8.89 percent, reflecting a marginally higher perceived risk profile.
The Revenue Growth Assumption has been cut materially, from around 8.42 percent to roughly 4.61 percent, indicating expectations for a slower expansion pace.
The Net Profit Margin Outlook has improved modestly, increasing from about 9.94 percent to approximately 10.68 percent.
The Future P/E Multiple has compressed meaningfully, declining from roughly 34.0x to about 23.7x, signaling a more conservative valuation framework.

Rapid adoption of Globant's AI pod and platform-centric models is reshaping revenue streams, increasing client value, and boosting customer retention beyond peer expectations.
Advanced AI automation and delivery innovations are driving significant margin expansion and operational efficiency, positioning Globant as a key orchestrator in large-scale digital transformations.
Rising automation, wage pressures, client concentration, and operational complexity threaten margin stability and sustainable growth amidst stiff competition in digital transformation services.

Catalysts

About Globant

Provides technology services worldwide.What are the underlying business or industry changes driving this perspective?

Analyst consensus anticipates strong AI-driven revenue growth for Globant, but this likely underestimates the transformative impact of the subscription-based AI pod model, which is already gaining rapid adoption and could meaningfully accelerate topline growth and recurring revenue far beyond current forecasts as AI project complexity and value per client rise dramatically.
Analyst consensus expects operational efficiencies and margin expansion from AI platform scaling, yet margin gains could be far more substantial: Globant's integrated, token-based AI delivery architecture and advanced automation threaten to structurally reset delivery costs and unlock high-double-digit operating margin potential as AI pod supervision requirements drop over time.
Unlike peers, Globant's ability to enable and manage massive at-scale AI transformations-spanning physical robotics, real-time 3D, and enterprise cloud migration-positions it as a central orchestrator of next-generation business models, expanding its addressable market and capturing larger, multi-year contracts with premium pricing, lifting both revenue and net margins.
The company's proprietary Enterprise AI platform and adjacent digital products are driving a shift from project-centric to platform-centric client engagements, markedly increasing customer stickiness and long-term wallet share, thereby stabilizing and amplifying multi-year revenue streams.
Globant's early leadership deploying AI to orchestrate distributed workforces, global capability centers, and outcome-based contracts directly benefits from the persistent global shift to remote/hybrid work and near/offshoring, enabling the company to optimize utilization rates, capture greater cost arbitrage, and sustain margin expansion ahead of industry peers.

Globant Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

This narrative explores a more optimistic perspective on Globant compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
The bullish analysts are assuming Globant's revenue will grow by 8.4% annually over the next 3 years.
The bullish analysts assume that profit margins will increase from 4.4% today to 9.9% in 3 years time.
The bullish analysts expect earnings to reach $314.3 million (and earnings per share of $7.56) by about September 2028, up from $110.3 million today. The analysts are largely in agreement about this estimate.
In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 34.0x on those 2028 earnings, up from 24.0x today. This future PE is greater than the current PE for the GB IT industry at 29.0x.
Analysts expect the number of shares outstanding to grow by 2.02% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.86%, as per the Simply Wall St company report.

Globant Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Globant's long-term growth may be negatively impacted as the increasing adoption of AI and automation drives both clients and competitors to rely more on commoditized solutions, pressuring both revenue growth and net profitability by eroding pricing power in digital transformation services.
Persistent wage inflation, especially in Latin America and key delivery regions, alongside ongoing global talent shortages, may drive up operating costs faster than revenue, compressing net margins and making sustained earnings growth more challenging.
Intensified price competition and market saturation in mature outsourcing and digital transformation markets could put downward pressure on both margins and topline revenue as clients shop for lower-cost or more automated alternatives.
High client concentration risk persists, evidenced by the outsized impact specific clients or geographies (such as North America or professional services clients) have on sequential revenue, exposing Globant to sudden revenue shortfalls if any large client reduces spending or churns.
Rapid expansion into new geographies and aggressive scaling of the workforce, coupled with the need to constantly upskill employees in fast-moving technologies like advanced AI and cloud-native solutions, risks operational inefficiencies and could inflate SG&A expenses, squeezing net margins if execution falters.

Valuation

How have all the factors above been brought together to estimate a fair value?

The assumed bullish price target for Globant is $180.01, which represents two standard deviations above the consensus price target of $106.2. This valuation is based on what can be assumed as the expectations of Globant's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $240.0, and the most bearish reporting a price target of just $74.0.
In order for you to agree with the bullish analysts, you'd need to believe that by 2028, revenues will be $3.2 billion, earnings will come to $314.3 million, and it would be trading on a PE ratio of 34.0x, assuming you use a discount rate of 8.9%.
Given the current share price of $59.98, the bullish analyst price target of $180.01 is 66.7% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystHighTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystHighTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystHighTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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