Globant's (GLOB) Q3 results have improved visibility into the company's 2026 growth, with UBS BB expecting sequential improvement throughout the year, driven by a growing pipeline and better conversion trends.

The brokerage said in a Monday note that the Q3 results were largely in line with the company's guidance, with a slight revenue beat versus UBS estimates and consensus, which supports the view that growth may be bottoming out.

For 2026, UBS BB said its revenue expectations remain unchanged, while its adjusted earnings before interest and taxes margin estimate rises by 11 basis points. Adjusted earnings per share are expected to decline by about 3%, reflecting higher net income offset by a greater number of shares outstanding at the end of Q3.

The firm noted that margin improvements, deleveraging, and a focus on profitability reduce concerns over cash generation for the year.

Looking at the broader IT services sector, UBS BB said growth trends are improving across most peers, supporting expectations for some degree of topline recovery for Globant next year, though still in the low single digits.

The brokerage also highlighted that price deflation in the sector is not seen as disruptive and that AI-related revenues are showing clearer signs of acceleration, though investors are awaiting consistent positive signals before fully regaining confidence.

The firm maintained a neutral rating on the stock and lowered its price target to $70 from $75.

Shares of Globant were up 1.6% in recent trading.

Price: 59.83, Change: +0.95, Percent Change: +1.60