Globant (GLOB) reported a slight beat in its fourth-quarter earnings, with an adjusted EPS of $1.62, marginally surpassing the analyst consensus of $1.61. The revenue for the quarter also saw a slight increase to $580.7 million, just above the consensus estimate of $579.45 million. Despite these gains, the company's shares fell by 4.9% as the guidance for the first quarter and full fiscal year of 2024 fell short of analyst expectations.
The fourth-quarter revenue represented an 18.3% increase YoY, signaling robust growth for the company. However, the guidance provided by Globant for the first quarter of 2024 sets the adjusted EPS at a minimum of $1.53, which is below the consensus of $1.54. Furthermore, the projected Q1 revenue is at least $570 million, also trailing behind the expected $574.5 million. For the full fiscal year of 2024, Globant anticipates an adjusted EPS of at least $6.50 and revenue of at least $2.435 billion, both figures not meeting the consensus estimates of $6.68 for EPS and $2.469 billion for revenue.
The company's CEO, Martín Migoya, highlighted the past year's achievements, including market expansion and new client relationships. He emphasized Globant's focus on AI and generative AI capabilities, positioning the company for future growth. The CEO's optimistic outlook for 2024 and the potential of the total addressable market were tempered by the market's reaction to the forward-looking guidance.
While the fourth quarter saw a healthy year-over-year growth in revenue, investors are seemingly cautious about the company's projections for the upcoming periods. The decline in share price reflects the market's response to the guidance miss, overshadowing the earnings beat for the quarter. Globant's strategic acquisitions and global presence suggest a commitment to expanding its service offerings, yet the immediate investor sentiment remains wary as the company's financial forecasts fall short of Wall Street's expectations.
Following the report, Jefferies, which has a Buy rating and $275 price target on the stock, said GLOB's revenue and earnings were in line with their expectations, while "2024 guidance appears a bit conservative".
"Analysts struck an optimistic but cautious tone as client conversations remain productive amid signs of growing demand, but visibility into 2H24 remains low," they wrote. "We've lowered our adj EPS estimate by $0.29 to $6.55 on what should be transient headwinds in 1H24."