Globant (NYSE:GLOB) Shares Gap Down - Time to Sell?

Key Points

• Globant shares gapped down on Tuesday, opening at $30.34 after closing at $32.12 and last trading near $31.75.
• Recent analyst sentiment has turned more cautious, with several firms cutting price targets and William Blair downgrading the stock; the overall consensus rating is now Hold with an average target price of $58.18.
• The company’s latest quarter was mixed: EPS matched estimates at $1.50 and revenue slightly beat forecasts, but sales were down 0.7% year over year, even as Globant authorized a $50 million stock buyback.

Shares of Globant S.A. (NYSE:GLOB - Get Free Report) gapped down before the market opened on Tuesday . The stock had previously closed at $32.12, but opened at $30.34. Globant shares last traded at $31.75, with a volume of 191,371 shares trading hands.

Analyst Upgrades and Downgrades

GLOB has been the subject of a number of analyst reports. Deutsche Bank Aktiengesellschaft set a $33.00 target price on Globant in a report on Friday. Wells Fargo & Company decreased their price objective on Globant from $50.00 to $42.00 and set an "equal weight" rating for the company in a research note on Friday. Wedbush reaffirmed an "outperform" rating on shares of Globant in a research report on Monday, May 18th. TD Cowen cut their target price on Globant from $59.00 to $47.00 and set a "buy" rating on the stock in a research note on Thursday. Finally, William Blair downgraded shares of Globant from an "outperform" rating to a "market perform" rating in a report on Tuesday, June 30th. Seven investment analysts have rated the stock with a Buy rating, eleven have given a Hold rating and one has given a Sell rating to the company. Based on data from MarketBeat.com, the stock currently has an average rating of "Hold" and a consensus target price of $58.18.

Globant Price Performance

The company has a market cap of $1.39 billion, a PE ratio of 12.86, a PEG ratio of 1.10 and a beta of 1.06. The company has a debt-to-equity ratio of 0.16, a current ratio of 1.82 and a quick ratio of 1.82. The stock's 50-day moving average is $35.74 and its 200 day moving average is $47.58.

Globant (NYSE:GLOB - Get Free Report) last released its quarterly earnings results on Friday, May 15th. The information technology services provider reported $1.50 earnings per share (EPS) for the quarter, hitting the consensus estimate of $1.50. Globant had a net margin of 4.46% and a return on equity of 9.87%. The business had revenue of $607.09 million for the quarter, compared to analyst estimates of $601.65 million. During the same period in the previous year, the company earned $1.50 earnings per share. The business's revenue for the quarter was down .7% on a year-over-year basis. On average, equities analysts anticipate that Globant S.A. will post 4.91 earnings per share for the current fiscal year.

Globant declared that its Board of Directors has authorized a stock buyback program on Monday, May 18th that allows the company to buyback $50.00 million in outstanding shares. This buyback authorization allows the information technology services provider to purchase up to 2.9% of its stock through open market purchases. Stock buyback programs are generally an indication that the company's board of directors believes its shares are undervalued.

Institutional Investors Weigh In On Globant

Hedge funds and other institutional investors have recently added to or reduced their stakes in the business. Pzena Investment Management LLC acquired a new stake in Globant in the first quarter worth about $136,893,000. Brandes Investment Partners LP increased its holdings in shares of Globant by 4.0% during the fourth quarter. Brandes Investment Partners LP now owns 2,400,732 shares of the information technology services provider's stock valued at $156,936,000 after acquiring an additional 91,732 shares in the last quarter. Capital International Investors raised its position in shares of Globant by 10.6% in the 4th quarter. Capital International Investors now owns 2,283,802 shares of the information technology services provider's stock valued at $149,292,000 after purchasing an additional 218,570 shares during the last quarter. Royal Bank of Canada raised its position in shares of Globant by 8.5% in the 4th quarter. Royal Bank of Canada now owns 1,777,710 shares of the information technology services provider's stock valued at $116,209,000 after purchasing an additional 138,596 shares during the last quarter. Finally, Wasatch Advisors LP raised its position in shares of Globant by 19.0% in the 4th quarter. Wasatch Advisors LP now owns 1,243,309 shares of the information technology services provider's stock valued at $81,275,000 after purchasing an additional 198,318 shares during the last quarter. 91.60% of the stock is currently owned by hedge funds and other institutional investors.

About Globant

Globant is a digitally native technology services company founded in 2003 in Buenos Aires, Argentina. Specializing in software development and digital transformation, Globant partners with enterprises to conceive, design and engineer software products and platforms. The company leverages agile methodologies and proprietary delivery frameworks to accelerate projects in areas such as cloud migration, user experience design, data analytics, artificial intelligence and blockchain-enabled solutions.

Globant's service offerings span strategy consulting, custom software engineering, digital experience design and managed services.

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