Globant S.A. (NYSE: GLOB)

Sector: Technology Industry: Information Technology Services CIK: 0001557860
Market Cap 2.92 Bn
P/B 1.34
P/E 29.29
P/S 1.18
ROIC (Qtr) 4.31
Div Yield % 0.00
Rev 1y % (Qtr) 0.40
Total Debt (Qtr) 675.14 Mn
Debt/Equity (Qtr) 0.31

About

Globant S.A., a prominent player in the global technology services market, trades on the New York Stock Exchange under the symbol "GLOB". The company's inception in 2003 can be traced back to four entrepreneurs in Argentina. Today, Globant is recognized for its delivery of engineering, innovation, and design at scale, with a primary focus on digital transformation, artificial intelligence, cloud, and cybersecurity. The core of Globant's business activities involves delivering digital transformation, software development, technology consultancy,...

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Price action

Investment thesis

Bull case

  • Operating cash flow of 266.98M provides exceptional 378.70x coverage of minority interest expenses 705000, showing strong core operations.
  • Cash position of 154.91M provides exceptional 219.72x coverage of minority interest expenses 705000, indicating strong liquidity.
  • Retained earnings of 924.17M provide full 1.71x coverage of long-term debt 538.90M, indicating strong internal capital position.
  • Operating cash flow of 266.98M fully covers other non-current liabilities 71.14M by 3.75x, showing strong long-term stability.
  • Retained earnings of 924.17M provide strong 3.86x coverage of other current liabilities 239.34M, indicating earnings quality.

Bear case

  • Operating cash flow of 266.98M barely covers its investment activities of (359.22M), with a coverage ratio of -0.74, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Tax assets of 88.27M provide limited offset against tax liabilities of 286.15M, which is 0.31x, indicating potential future cash flow pressure from tax obligations.
  • R&D investment of 0 represents just 0x of SG&A expenses of 645.02M, indicating potential underinvestment in innovation relative to administrative overhead.
  • Cash position of 154.91M provides only 3.66x coverage of interest expenses of 42.27M, indicating potential refinancing risks in a rising rate environment.
  • Cash position of 154.91M provides minimal 0.24x coverage of SG&A expenses of 645.02M, indicating potential operational inflexibility in market downturns.

Peer comparison

Companies in the Information Technology Services
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 IBM International Business Machines Corp 279.99 Bn 35.41 4.28 66.57 Bn
2 ACN Accenture plc 168.17 Bn 22.09 2.38 8.20 Bn
3 INFY Infosys Ltd 74.96 Bn 23.74 3.89 -
4 CTSH Cognizant Technology Solutions Corp 41.45 Bn 19.48 1.99 1.17 Bn
5 FIS Fidelity National Information Services, Inc. 35.21 Bn 231.62 3.36 13.00 Bn
6 WIT Wipro Ltd 29.93 Bn 19.70 2.97 1.95 Bn
7 BR Broadridge Financial Solutions, Inc. 26.38 Bn 28.51 3.74 3.28 Bn
8 LDOS Leidos Holdings, Inc. 23.72 Bn 16.88 1.37 5.23 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.06 1.44
EV to Cash from Ops. EV/CFO 13.26 5.63
EV to Debt EV to Debt 5.24 8.06
EV to EBIT EV/EBIT 20.69 -4.05
EV to EBITDA EV/EBITDA 8.96 -0.52
EV to Free Cash Flow [EV/FCF] EV/FCF 22.53 -1.66
EV to Market Cap EV to Market Cap 1.21 1.35
EV to Revenue EV/Rev 1.42 57.14
Price to Book Value [P/B] P/B 1.34 3.34
Price to Earnings [P/E] P/E 29.29 -5.47
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -0.83
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 0.66
Dividend per Basic Share Div per Share (Qtr) 0.00 0.47
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 6.24
Interest Coverage Int. cover (Qtr) 4.05 -319.17
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 1.12 -253.62
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -22.17 114.15
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 35.23
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -31.27 -22.49
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 0.00 -25.03
EBIT Growth (1y) % EBIT 1y % (Qtr) -29.18 -82.44
EBT Growth (1y) % EBT 1y % (Qtr) -39.34 97.07
EPS Growth (1y) % EPS 1y % (Qtr) -42.09 147.29
FCF Growth (1y) % FCF 1y % (Qtr) -2.53 -8,638.64
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 3.87 -8.24
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.74 0.78
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.01
Cash Ratio Cash Ratio (Qtr) 0.31 0.66
Current Ratio Curr Ratio (Qtr) 1.93 2.12
Debt to Equity Ratio Debt/Equity (Qtr) 0.31 0.88
Interest Cover Ratio Int Coverage (Qtr) 4.05 -319.17
Times Interest Earned Times Interest Earned (Qtr) 4.05 -319.17
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 0.00 -550.76
EBIT Margin % EBIT Margin % (Qtr) 6.88 -775.74
EBT Margin % EBT Margin % (Qtr) 5.18 -827.89
Gross Margin % Gross Margin % (Qtr) 35.20 24.07
Net Profit Margin % Net Margin % (Qtr) 4.00 -830.34