Luxembourg-based Globant helps companies augment and optimize their digital presence. It has operations in North and South America and Europe, including 56 centers in Argentina, Uruguay, Colombia, Brazil, Mexico and Peru.
Globant’s website says it has more than 21,800 employees in 18 countries working for customers that include Alphabet‘s (GOOGL) Google, Rockwell Automation (ROK), Electronic Arts (EA) and Santander (SC).
Digital Transformation Spending Helps Stock To Watch
“According to IDC, digital transformation spending is expected to reach $6.3 trillion between 2022 and 2024,” Martin Migoya, Globant’s CEO and co-founder, said in commenting on Q3 results.
“As a leader in this growing space, we continue to innovate,” he continued. “We recently announced new digital Studios, such as the Metaverse studio, and intend to continue expanding our capabilities, including our new Reinvention Studios focused on disruptive industries. We expect to close this year with over 56% annual revenue growth, the highest in our history as a publicly traded company.”
Migoya noted that Q3 margins improved, driven by strong pricing power and operating efficiencies.
Globant ranks No. 4 among its computer tech services group in IBD’s Stock Checkup. Other highly rated stocks to watch in the group include Epam Systems (EPAM), Grid Dynamics (GDYN), Endava (DAVA) and Proficient (PRFT).
The computer tech services group itself ranks a strong No. 29 out of IBD’s 197 industry groups. Groups ranked higher than 40 tend to hold the most stock market winners.
Stocks To Watch: Globant’s Earnings
The IT company carries an Earnings Per Share Rating of 98, just shy of a perfect 99. Earnings have risen a brisk 41%, 96% and 75% in the past three quarters.
Robust earnings and sales growth is expected to continue. Analysts tracked by FactSet see Globant’s EPS climbing 46% in Q4 to $1.02 a share on sales of $359.3 million, a 54% gain.
For all of 2021, Wall Street sees EPS jumping 45% to $3.56 on sales of $1.28 billion, up 56%. It sees next year’s EPS up 24% to $4.52 with sales increasing 29% to $1.64 billion.
Globant Stock Forming Base
GLOB stock is within 11% of a cup-base buy point of 354.72. The entry point was set by the right side of the formation that started at its Nov. 9 high, according to MarketSmith chart analysis. Watch to see if the stock forms a handle, which could provide an earlier entry point.
The stock undercut its previous base, which formed from September to early November. That means the base count resets, and the current pattern is an early stage formation.
Globant’s recent stock price action has earned it a Relative Strength Rating of 93. Its relative strength line has trended higher after dipping from a high that coincided with the stock’s Nov. 9 high. This uptrend indicates that the stock has been outperforming the market as it’s rallied from its Dec. 6 low.
Watch to see if GLOB stock’s relative strength line lifts to a new high, particularly if the deed is done before the stock does the same. That portends heavy institutional investor interest from the likes of mutual funds.
Among other IT stocks to watch on Wednesday, Epam Systems (EPAM) eased 0.5% to 687.55; Grid Dynamics (GDYN) rose 1.7 to 37.15 and held above the 50-day moving average; Endava (DAVA) rose 0.5% to 167.78; and Perficient (PRFT) was nearly flat at 132.36.
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