This Stock Is A Bulldozer
For as long as people have been investing in equities, investors have been looking for big white whales–individual stocks that offer enormous potential for growth and demonstrate stable gains over many quarters.
Right now, one of those impressive giants is Globant, an IT consulting company that has its fingers in a lot of the new innovations that seem to be driving the tech industry. Investors have been scrutinizing the last few quarters results, attempting to figure out what’s in store for this breakout company.
Let’s look at Globant and see why it’s gaining in popularity.
Globant Stock Activity
First of all, Globant (GLOB) has shown tremendous growth over the last five years. People make a lot of noise about Tesla’s astonishing gains over the past couple of years, but there’s not as much awareness of GLOB’s consistent returns through the two pandemic years, and the three years prior. It’s up about 5x in those 5 years.
Starting in 2017, with a share price of $33 per share, the stock spiraled up continually year after year to reach all-time highs of close to $350 this past November.
Even over a one year timeline, GLOB started out around $200 and rose almost 75% to all-time highs at its peak. That’s a lot of green ink, and those numbers have turned analysts’ heads as GLOB represents a major mover in IT, even after a recent pullback.
Revenue and Quarterly Numbers
Revenue and earnings per share are also impressive. When the company last announced results, revenue was $342 million, up 65%, and EPS was $0.98 per share, up 75%, and that’s accounting for any share dilution that occurred.
These numbers beat analyst estimates, and now predictions for GLOB are pretty bullish: analysts are calling for revenue of $359 million in quarter four, and EPS of $1.01.
The EPS numbers themselves show a dramatic growth in value for the quarter; notwithstanding some bigger EPS marks in June of 2020 ($1.30), September of 2019 ($2.00) and March 2019 ($1.60). Previous quarters saw EPS usually under $0.50, although nowhere near negative. The bottom line is the projections for the next quarter seem pretty rosy.
What does Globant actually do that makes it special and creates so much buzz?
Within the general category of IT consulting and product engineering, the company operates dozens of “studios” in which advances in technology are planned and implemented.
For example, Globant has an emerging ‘metaverse studio’ that’s going to be engaged in the kind of virtual reality work that investors are excited about right now. With forays into digital twinning, virtual productions, and more, GLOB is proactive about bringing a sophisticated approach to VR for its clients.
All of this gives the firm a significant advantage when it comes to competitors. We’ve often talked about how investors like Warren Buffett suggest companies should have a sustainable competitive advantage or “moat” to prevent others from coming in and scooping up market share.
GLOB seems to fit the bill here because there are few companies in its space with this kind of initiative. When spokespersons talk about “synthetic environments” or tout the company’s record of advising clients on metaverse implementations, they’re talking about something that is relatively new, and still far from common in today’s business world.
In addition, it’s important to note that Globant has an impressive client list and works with companies like Amazon and Microsoft, as well as specialized sector winners Adobe and Salesforce.
Other Inclinations and Indicators
Beyond the hard numbers, investors are also positive about Globant’s corporate culture and track record. Management longevity is something that some shareholders see as a plus for this company. There’s also a sky-high approval rating for the management approach that the company is taking right now. All of that, plus the fastest revenue growth in the company’s history, is propelling further interest.
The sustained growth pattern over five years suggests that GLOB has made its own mark and is going to be a force to be reckoned with as artificial intelligence and virtual reality both become integrated into global business systems.