Despite a sharp pullback in its share price over the past six months, Globant (GLOB -1.13%), an IT consulting company, has produced market-crushing returns for its investors. Yet, not many know about Globant. The company has been a model of consistency, and the recent news of its acquisition of GeneXus is an example of how Globant has been meticulously crafting its growth trajectory. Let's review why taking a closer look at Globant will be a smart decision for investors.

Growing revenue like clockwork

Globant, founded in 2003 by four friends in Argentina, has emerged as a prominent global IT consulting company. Globant helps its customers adopt modern technologies to grow revenue, improve efficiencies, and reduce costs. The company has built industry-leading capabilities in the key pillars of digital transformation -- including consumer experience designs, software engineering, cloud technologies, and artificial intelligence. It has also compiled an impressive rolodex of clients such as Alphabet's Google, Unilever, American Express, and many others. Globant's splendid resume includes:

  • Leveraging AI to help Autodesk in predicting health and safety issues for its construction clients.
  • Helping Electronic Arts in developing the next generations of FIFA, NHL, and UFC games.
  • Engineering the digital transformation of one of the largest theme parks for Disney
Image shows a business office meeting.

Image source: Getty Images.

Globant's consistent high-quality work has resulted in durable and trusted partnerships with its clients, who are awarding Globant more and more work.

Image shows a table with Globant's customer accounts paying over $1 million.

Data source: Company earnings release. 

Not surprisingly, over its eight years of being publicly traded, Globant has grown its revenue at an eye-popping average annual rate of about 31%.

Image shows a bar graph of revenues from 2014 through 2021.

Data source: Company earnings release. YOY = Year over year. CAGR = Compound Annual Growth Rate. 

The company expects to carry its momentum into 2022 with at least 35% growth in its revenue.

Not resting on its laurels

While building strong internal technical capabilities has been a key to Globant's success, selective strategic and tuck-in acquisitions have been an integral part of the company's growth strategy. Smart acquisitions allow Globant to extend its technology capabilities, broaden its service offerings, deepen its client relationships, and expand its geographic footprint. 

On April 20, 2022, Globant announced that it is acquiring GeneXus, a company of 150+ professionals based in South America. GeneXus has developed a low-code platform -- a technology that simplifies and speeds up software development and helps in process automation -- to boost productivity for businesses. GeneXus's business purpose is at the heart of Globant's focus on excelling as a leading provider of digital transformation. The acquisition gives Globant access to GeneXus's 1,700+ clients in a variety of industries in Latin America and Asia.

Over 2020 and 2021, Globant made nine such acquisitions. The company's ability to identify and acquire businesses smartly, and more importantly, integrate them effectively to drive business growth, creates a major competitive advantage for Globant. 

Where do we go from here?

According to IDC, a market research firm, global digital transformation spending -- the primary focus of Globant's services -- will reach an unbelievable $6.3 trillion in 2024. Globant, with its 2021 revenue of $1.3 billion, is just getting started and has a tremendous opportunity in front of it. The company is well-positioned to compete against capable rivals such as Accenture and Endava to continue its growth.

Despite a steep 35% decline in its share price along with the broader market pullback over the past six months, Globant has handily beat the S&P 500 index over the past five years.

GLOB Total Return Level Chart

GLOB Total Return Level data by YCharts

Even almost two decades after its founding, all four co-founders -- including CEO Martin Migoya -- are still actively involved with the company, holding critical senior management roles. Globant, under their leadership, seems to be making all the right moves to reach even higher horizons. Now may be a great time for patient long-term investors to get more familiar with this relatively overlooked winner.