Globant S.A.

▲ Bull Case

• ◆Tech spending re-acceleration validates cyclical-trough thesis: organic growth recovers from +5% (FY2025) to 12–13% by FY2027; AI Studio scales from ~$110M (~4–5% of revenue) to >$500M (>10% of revenue) by 2029 with 200–300 bps gross margin premium.
• ◆Argentina FX tailwind compounds through Milei-controlled devaluation at ~20–25% nominal pace, sustaining 50–100 bps annual gross margin tailwind; combined with utilization recovery and SG&A operating leverage, Adj. EBITDA margins expand from 18.4% to 22.0% by 2029.
• ◆Multiple re-rating from depressed ~4.6x EBITDA toward peer median ~10x EBITDA as growth narrative is restored; buyback authorization (20–30% probability) catalyzes re-rating; implied upside to $150–$170 if base case and multiple normalization materialize.

▼ Bear Case

• ◆AI coding tools achieve material productivity gains within 24–36 months, compressing billable hours per project 20–30%; outsourced IT services demand grows only 4–6%, revenue per Glober flatlines, margins compress as fixed-cost base spreads over slower-growing revenue.
• ◆Argentina stabilization removes FX tailwind without unlocking offsetting demand; wage normalization in USD-equivalent terms compresses gross margins; Argentine engineers continue emigrating to Spain/Portugal/Miami, draining senior talent pool as cost advantage erodes.
• ◆One marquee client loss cascades: Disney (~8–10% of revenue) cuts scope by half or insources gaming; revenue hole takes 6–8 quarters to refill; Convertible note refi forces $50–75M cash drag at 8–9% coupon; multiple contracts further to 4–5x EBITDA on negative earnings revisions.

“The Hold-skewed consensus (1 Buy / 8 Hold) debates whether AI productivity disruption is a 2-year acute risk or 5–10 year secular drift. Bull camp sees AI as net additive to IT services demand; bear camp sees Copilot/Cursor/Devin commoditizing entry-level engineering work (~50–60% of revenue). Secondary debate concerns Argentina's FX trajectory under Milei—most analysts credit fiscal consolidation but disagree on FX impact direction. Variant view holds that Argentina's risk premium is mis-specified (devaluation historically net positive) and AI is a near-term headwind / medium-term tailwind.”

• ◆Q3'25 earnings beat + guidance raise (40–50% probability, +15–25% impact)
• ◆Disney scope stabilization or expansion announcement (50–60% probability, +10–15% impact)
• ◆Argentina IMF program positive review / continued disinflation (55–65% probability, +10–20% impact)
• ◆Organic growth re-acceleration to 12%+ (35–45% probability, +40–60% impact)
• ◆Convertible note resolution without dilution (70–80% probability, +5–10% impact)
• ◆Share buyback authorization >$200M (20–30% probability, +15–20% impact)
• ◆AI Studio disclosed revenue >$300M (40–50% probability, +30–50% impact)

• ◆AI demand disruption (Medium probability, Catastrophic impact, 15/25 score) — Watch revenue/Glober; AI Studio % of revenue
• ◆Argentina crisis / capital controls (Medium probability, Major impact, 12/25 score) — Watch ARS/USD, IMF reviews, capital-flow data
• ◆Prolonged enterprise IT spending freeze (Medium probability, Major impact, 12/25 score) — Watch peer guidance, Gartner forecasts
• ◆LatAm talent wage inflation (High probability, Moderate impact, 12/25 score) — Watch attrition, Glassdoor, salary benchmarks
• ◆Key client concentration (Low probability, Major impact, 8/25 score) — Watch earnings call commentary on top accounts
• ◆Cybersecurity / reputational incident (Low probability, Major impact, 8/25 score) — Watch incident disclosures, SOC2 status
• ◆Convertible note refi cost (Low probability, Moderate impact, 6/25 score) — Watch convertible-debt market, rate environment