Globant (GLOB) Moves 5.1% Higher: Will This Strength Last?

·2-min read

Globant (GLOB) shares ended the last trading session 5.1% higher at $214.96. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 9.8% loss over the past four weeks.

The upswing in share price came after the company reported impressive first-quarter 2021 results, which reflected 41% year-over-year increase in revenues to $270 million, fueled by gains from momentum in its Studios and AI-accelerator offerings as more organizations realized the need for digital transformation.

Disney was the largest customer in the first quarter, growing strongly at 27.4% year-over-year and 14.7% quarter-over-quarter. Other than Disney, the rest of the accounts collectively grew at a solid 42.8% year-over-year, with revenues from top 5 and top 10 accounts increasing at a robust rate of 37.5% and 41.2%, respectively, over the first quarter of 2020.

Price and Consensus

Price Consensus Chart for GLOB
Price Consensus Chart for GLOB

This information technology services provider is expected to post quarterly earnings of $0.79 per share in its upcoming report, which represents a year-over-year change of +54.9%. Revenues are expected to be $257.54 million, up 41% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Globant, the consensus EPS estimate for the quarter has been revised 1% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on GLOB going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

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