Manhattan Associates Earnings: Good Results With a Solid Preview for 2024

Narrow-moat Manhattan Associates reported third-quarter results that came in ahead of our expectations thanks to its strong cloud performance. Management’s initial guidance for 2024 was also generally in line with our model, even with modest headwinds from the firm’s cloud transition. We think these results and guidance were solid, but since we suspect that recent strength in revenue and profitability was being carried forward in the minds of many investors, shares were down about 6% in the aftermarket. We believe Manhattan’s investment in diversifying its portfolio and advancing its cloud-native platform will continue to bear fruit as evidenced by the firm’s impressive win rates, particularly with respect to obtaining new logos. We are maintaining our fair value estimate of $172 per share and view shares as fairly valued.