Globant Earnings: Conservative Guidance Disappoints, but Shares Undervalued

Narrow-moat Globant reported first-quarter 2024 results that were broadly in line with FactSet consensus, but it tweaked revenue and margin outlooks for the year. Management lowered its adjusted margin range from 15%-16% to 14.5%-15.5% on lower expected utilization rates and continued foreign exchange headwinds. On revenue, management adjusted the guidance range to $2.405 billion to $2.440 billion from at least $2.435 billion. Globant shares are down over 20% year to date and look to be down further in premarket trading. With no expected change to our $201 fair value estimate, we view the shares as undervalued at current levels.