Software company Globant SA suffered a record intraday decline after blaming its disappointing first-quarter results on the ripple effects of US tariffs.
Globant shares plunged as much as 33.7 percent on Friday to US$88.03, the worst drop since the company went public in 2014, before paring some of those losses.
So far this year, Globant’s stock is down more than 53 percent on a total return basis, which puts it last among information technology services companies in the Russell 1000 index, according to data compiled by Bloomberg. Over the past decade though, it’s one of the best performers in the sector.
Globant cut its revenue guidance Thursday to two percent growth for 2025 from at least 9.1% previously. Its first quarter revenue and adjusted earnings per share also missed analyst expectations.
Chief Executive Officer Martín Migoya blamed the weak results on rising uncertainty stemming from US President Donald Trump’s tariffs, which have increased the probability of a US recession this year. He said, however, that Globant’s investments in artificial intelligence and overall fundamentals have positioned it for more growth ahead.
“Uncertainty from trade tariffs has impacted a good portion of our customers,” Migoya said on an earnings call Thursday. “We observed a slower pace of pipeline conversion in the US, and growth in some countries in Latin America has been lower than expected.”
Globant’s rough patch comes after a decade of surging growth in its operations around the world. Founded in Argentina, the company’s shares have returned 478 percent to investors over the past 10 years. Its employee headcount has jumped tenfold over that period to more than 31,000 as of last year, according to company filings.
James Schneider, an analyst at Goldman Sachs Group Inc, and Arvind Ramnani of Piper Sandler & Co downgraded the shares to neutral from a buy rating after the results. But about two-thirds of 23 analysts covering the stock still recommend adding shares. While Globant is well positioned for the longer term, it will be hard for the company to take steps to drive meaningful upside to broader demand trends, Ramnani said in a note.
by Patrick Gillespie, Bloomberg
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