Manhattan Associates Earnings: Magnitude of Beat Narrows While 2025 Guide Likely Skews Conservative

Wide-moat Manhattan Associates reported third-quarter results ahead of our expectations, while the outlook for the fourth quarter and 2025 were mixed relative to our model. Notably, revenue guidance was slightly shy, and profitability was better with respect to our estimates. Despite continued deal slippage, management remains comfortable with the pipeline. The company continues to find success in migrating its customers to the cloud, which in turn also increases services revenue and ultimately results in operating leverage as its cloud business scales. We think Manhattan remains in the early stages of this process. Based on the results and the preliminary guidance for 2025, we maintain our fair value estimate of $240 per share. Given shares have more than doubled over the last two years, we now view the stock as overvalued.