Globant Stock Tumbled 14% Today – Why JPMorgan’s Rating Downgrade Drew Investor Attention
Synopsis
JPMorgan said that Globant’s previous reputation for delivering premium growth and consistent execution now appears ‘challenged.’
JPMorgan downgraded Globant S.A.’s (GLOB) stock from ‘Overweight’ to ‘Neutral’ and slashed its price target to $78 from $108, citing weaker-than-expected revenue guidance for fiscal 2025 and mounting uncertainty in the company’s growth outlook.
The downgrade came in the wake of Globant’s second-quarter (Q2) earnings update, which signaled a slower growth trajectory ahead. The firm noted that the revenue projections create a more difficult environment for achieving positive growth by fiscal 2026.
The company lowered its FY2025 revenue outlook to at least $2.445 billion, from $2.464 billion earlier, in line with the consensus estimate, as per Fiscal AI data. Globat sees Q3 revenue of at least $615 million, also matching the consensus estimate.
Globant S.A. stock tumbled over 14% on Friday mid-morning. However, on Stocktwits, retail sentiment around the stock remained in ‘extremely bullish’ territory while message volume improved to ‘extremely high’ from ‘high’ levels in 24 hours.
The stock saw an 860% surge in user message count in 24 hours, as of Friday morning. A bullish Stocktwits user said they are adding a small quantity of the stock.
In a note to clients, JPMorgan said that Globant’s previous reputation for delivering premium growth and consistent execution now appears ‘challenged.’ The firm pointed to macroeconomic headwinds and a delay in customers’ decision-making in an uncertain economic climate, which are weighing on investor confidence in the stock’s near-term potential.
“While we have delivered strong growth for many years, we have observed a more tempered demand environment over the last few quarters,” said CFO Juan Urthiague in the Q2 earnings call.
Globant S.A. stock has lost over 68% year-to-date and over 65% in the last 12 months.
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