Wall Street Analysts Just Trimmed Price Targets for These 10 Stocks

02. Globant S.A. (NYSE:GLOB)

Price Reaction after the Price Target Cut: -9.98(-5.62%)

On May 17, Needham maintained its buy rating on Globant S.A. (NYSE:GLOB) while revising down its price target from $275 to $200. This adjustment, which led to a price reaction of -5.62%, came on the heels of Globant S.A. (NYSE:GLOB) first-quarter financial results for 2024. Despite reporting revenue that exceeded expectations and meeting forecasts for earnings per share, the technology industry player experienced a significant reduction in its price target. Globant S.A. (NYSE:GLOB) impressive performance in the first quarter included a 20.9% year-over-year revenue growth, with organic constant currency growth reaching 12.7%. Notable achievements during this period included securing a lucrative contract with a major global airline, forging a partnership with Formula 1, and acquiring seven new clients, each contributing over $1 million in revenue.

However, despite these successes, Globant S.A. (NYSE:GLOB) provided a slightly conservative outlook for the second quarter and revised its full-year guidance downward, citing increased foreign exchange pressures as the primary reason. It’s worth noting that this adjustment in the annual forecast does not reflect a change in the company’s organic growth projections, which still anticipate a 10% year-over-year increase. This growth trajectory stands in stark contrast to the flat trends projected by Globant S.A. (NYSE:GLOB) competitors for fiscal year 2024. Needham emphasized that, based on an ex-cash forward price-to-earnings (P/E) multiple of approximately 21 times for fiscal year 2025, the current valuation offers an attractive risk-reward proposition for investors. Despite the adjustment in the price target in response to the updated company guidance and prevailing market conditions, Needham reiterated its positive stance on the stock.

Polen Global Growth Strategy stated the following regarding Globant S.A. (NYSE:GLOB) in its first quarter 2024 investor letter:

“Finally, we added to our existing position in Globant S.A. (NYSE:GLOB) with the proceeds from trimming back our Accenture position. We think this is prudent because Globant’s valuation isn’t much higher than Accenture’s, but it should be able to grow EPS faster at ~20%+ over the next five years. We see both as excellent businesses benefiting from similar tailwinds behind the increasing need for trusted third party IT services providers and continue to feel good about holding both companies for the long term.”