GLOB stock is up +55% this year as digital branding becomes the main goal for businesses. Having an online presence has never been more beneficial for companies. In fact, last year it pushed digital transformations to the top of the business priorities list. This resulted in growth of over 18%, according to an Acorio report.
With people spending more time online than ever before, businesses are fighting for a piece of your attention. New research shows nearly one-third of Americans are online constantly now.
With this in mind, Globant S.A (NYSE: GLOB) is bringing the latest technology to businesses to help them capture this trend. The company primarily focuses on IT and Software Development services to improve business visibility on the internet. Some of its biggest services include app & web development.
Founded in 2003, Globant is leading the digital movement we are seeing today. Through smart acquisitions and growing demand for its services, the company is growing into a digital empire. Furthermore, the company’s biggest customers include brand favorites such as:
- LinkedIn &
- American Express
That said, GLOB stock is 22% off its all-time high price, set in November. Looking to buy? Keep reading for everything you need to know about the stock.
Huge Q3 Earnings Beat
So far, the migration of businesses to the internet is proving to be a big win for GLOB stock investors. The tech services company continues growing at an exceptional rate. Since 2014, Globant is achieving +26% annual revenue growth (compound).
More importantly, the company’s profit margins are improving despite global supply chain issues and worker shortages. Globant is primarily an online business, so they have largely avoided these issues. Not only that, but the company’s areas of service are some of the fastest-growing industries right now.
Nonetheless, the third quarter was another big one, beating revenue estimates again. Here are some of the biggest takeaways from the report.
Revenue isn’t always the most important aspect to look at. But, it’s a good place to start when looking for growing companies. With this in mind, Globant’s top line advanced another 65% from last year, reaching $341.8 million.
Moreover, in the last 12 months, the tech firms’ revenue reached $1.15 billion. The top-line growth is excellent news for investors, showing there’s no shortage in demand.
Solid Balance Sheet
Another key point to consider when valuing a company is the strength of its balance sheet. With a strong cash position and $294 million in receivables, the company is solid financially.
On top of this, with the majority of its workers outside the U.S. With most of its sales in North America, Globant finds itself in a favorable position.
Growing Customer Count
In the third quarter, the company served a total of 1,018 customers. Not only that, but the clients are some of the top brands in the world. Furthermore, 162 of these customers are multi-million dollar accounts, growing 25% from 2020.
With a growing number of large clients, it shows its level of service. In fact, Globant is named a global leader in customer experience (CX) improvement.
How GLOB Stock Is Growing
For a company that’s been in business since 2003, it’s still growing at a rapid pace. Since then, the growing demand for its services shouldn’t come as a surprise with everything moving online. Yet Globant offers so much more than just building websites.
The company is involved in several industries promising to be the future of technology. As a result, companies are trying to gain an advantage by using the latest technology to promote their brand or connect with customers.
Thus, a few of the industries Globant supports include:
- Artificial Intelligence – Projected to reach $60 billion globally by 2025.
- Virtual Reality/ AR – Projected to top $80 billion by 2023.
- Digital Transformation – By 2024, 55% of global tech investments will be digital upgrades.
- Blockchain – Expecting business sales to increase 50% in 2021.
- Applications – 500 million new apps to be created by 2023.
- Artificial Intelligence – 25% of network devices will use AI algorithms by next year.
As you can see, by leading tech trends, the company is growing into big money industries.
What’s more, it’s not only big brands driving the growth. Companies all over the world are using its services. Although large corporations give steady revenue, growth partners like Mercado Libre provide ample opportunities to grow.
GLOB Stock Analysis
Despite over 100% growth in the past two years, GLOB stock is down 15% in the past three months. However, much of the drop is to blame on the overall market. In particular, software stocks have underperformed the past few months, as the SPDR S&P Software ETF is also down during this time.
With this in mind, Globant is looking to continue its momentum. The company upped its guidance for the 4th quarter in its last earnings. Altogether it’s now expecting revenue to grow another 54% to at least $359 million.
With the stock’s latest descent, it’s sitting just above critical support levels. Also, relative strength hit a yearly low just after thanksgiving and has been slowly rising since.
If the software sector continues underperforming, look for GLOB stock to retest these support levels.
How Does GLOB Stock Look Long Term?
Although you may experience short-term volatility, Globant is a significant factor in some of the fastest-growing industries. Also, GLOB stock is up over 700% in the past five years, with its services playing a critical role in the global marketplace.
If you want to sell goods online, you will generally need a website or app to do so. And this is where Globant specializes. Not only that, but they help companies scale with an abundance of tech services.
Looking long-term, GLOB stock is in an excellent position to capture the ongoing digital movement. Furthermore, a diverse customer base and what many would consider essential services for businesses to remain competitive can help them continue growing their top line.
About Pete Johnson
Pete Johnson is an experienced financial writer and content creator who specializes in equity research and derivatives. He has over ten years of personal investing experience. Digging through 10-K forms and finding hidden gems is his favorite pastime. When Pete isn’t researching stocks or writing, you can find him enjoying the outdoors or working up a sweat exercising.