“When a company promises organic growth 3x-4x faster than its next sector competitor, should it get rewarded or penalized for narrowly missing?” Citi analysts ask in a note issued to clients on Friday.
Their comments come after Globant SA (NYSE:GLOB) beat consensus revenue expectations and raised full-year sales guidance.
“The implied organic revenue outlook was down ~40bps to a remarkable 11.3% year/year when most competitors are delivering low-single digits,” they wrote in a note.
Citi has a Buy rating and a $215 per share price target on GLOB shares, implying upside potential of more than 30% relative to Thursday’s closing price.
Citi was quick to defend Globant after the stock fell in recent weeks. Shares are down 3% year-to-date.
Globant reported its Q2 earnings yesterday with the reported earnings per share (EPS) of $1.36 coming in roughly in line with analyst expectations. Revenue for the quarter amounted to $497.5 million, close to the consensus estimate of $496.6M.
The company anticipates EPS of $1.46 for the third quarter, slightly below the consensus estimate of at least $1.49. Revenue is seen reaching $545M, ahead of the expected $533M.
FY EPS is seen at $5.72 on revenue of $2.09 billion, which compares to the consensus for earnings of $5.71 on sales of $2.07B.
“We like Globant’s performance in a very difficult year for the industry,” the analysts added.