Company Reports

Narrow-moat Manhattan Associates reported first-quarter results ahead of our expectations on the back of the strength in cloud and services revenue. Management also raised its full-year revenue guidance for 2024 by approximately the upside for the first quarter and noted modest currency pressure while raising its full-year profitability target. The firm continues to succeed in migrating its customers to the cloud, increasing services revenue, and ultimately resulting in operating leverage as its cloud business scales. Based on results and guidance, we have increased our estimates and are raising our fair value estimate to $205 per share from $195. We view the shares as fairly valued after some after-hours pressure on the shares.

Manhattan Associates is the clear leader in the warehouse management systems, or WMS, software niche, in our view. Supply chains are complex and any disruption to warehouse operations could have a significant ripple effect among all nodes in the chain, which is captured in sticky customer relationships. When normalized for covid, we view the company as capable of driving low double digit revenue growth annually over the next five years, with earnings growth of approximately 18% during that time. In 2020, Manhattan Associates began transitioning its flagship warehouse management solution. As a result, we see a years-long mix shift from on-premises to cloud adoption and a path to both strong growth and returns.

Narrow-moat Manhattan Associates reported fourth-quarter results that came in ahead of our expectations, thanks to strong cloud and services revenue performance. Management also raised its guidance for 2024 and expects higher top-line growth and a higher adjusted operating margin than previously expected. The firm 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 continue to believe that Manhattan’s focus on growing its cloud-native platform in terms of customers and capabilities is a wise decision, backed by high win rates, increasing remaining performance obligation, or RPO, and evidence of operating leverage. Based on results and guidance, we have increased our estimates and are raising our fair value estimate to $195 from $172 per share. However, we view shares as overvalued after the recent runup in the stock.

Manhattan Associates is the clear leader in the warehouse management systems, or WMS, software niche, in our view. Supply chains are complex and any disruption to warehouse operations could have a significant ripple effect among all nodes in the chain, which is captured in sticky customer relationships. When normalized for COVID, we view the company as capable of driving low double digit revenue growth annually over the next five years, with earnings growth of approximately 18% during that time. In 2020, Manhattan Associates began transitioning its flagship warehouse management solution. As a result, we see a years-long mix shift from on-premises to cloud adoption and a path to both strong growth and returns.

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.

Narrow-moat Manhattan Associates reported second-quarter results that came in ahead of our expectations. Guidance was similarly good, with both revenue and EPS better than we were modeling for the third quarter based on stellar cloud momentum thus far and a robust services pipeline. We believe Manhattan’s investment in diversifying its offerings and advancing its cloud-native platform will continue to bear fruit, as evidenced by the firm’s impressive win rates. Despite persistent near-term macroeconomic headwinds, we view the firm’s solid bookings and expansion of its workforce to meet increasing demand as signs of strength. Thus, we raise our fair value estimate to $172 from $162. Still, we struggle with valuation for an otherwise high-quality name and would look for better value elsewhere within our coverage.

Manhattan Associates is the clear leader in the warehouse management systems (WMS) software niche, in our view. Supply chains are complex and any disruption to warehouse operations could have a significant ripple effect among all nodes in the chain, which is captured in sticky customer relationships. When normalized for COVID-19, we view the company as capable of driving low-double-digit revenue growth annually over the next five years, with earnings growth of approximately 18% during that time. In 2020, Manhattan Associates introduced a cloud version of its flagship warehouse management solution. As a result, we see a years-long mix shift from on-premises to cloud adoption.

Manhattan Associates is the clear leader in the warehouse management systems (WMS) software niche, in our view. Supply chains are complex and any disruption to warehouse operations could have a significant ripple effect among all nodes in the chain, which is captured in sticky customer relationships. When normalized for COVID-19, we view the company as capable of driving low-double-digit revenue growth annually over the next five years, with earnings growth of approximately 18% during that time. In 2020, Manhattan Associates introduced a cloud version of its flagship warehouse management solution. As a result, we see a years-long mix shift from on-premises to cloud adoption.

Narrow-moat Manhattan Associates reported first-quarter results above guidance and our expectations. The firm again raised its outlook for 2023 as it capitalizes on cross-selling opportunities and demonstrates its product resilience in the face of macroeconomic headwinds. Impressively, 25% of its cloud business in the quarter was generated from net new logos as verticals that are increasingly using a direct-to-consumer model recognize cost-reductions and operating efficiencies from Manhattan’s cloud-native platform. While macroeconomic challenges persist, Manhattan has invested to diversify its business and is less reliant on retail. We believe the decision is paying off, resulting in an outlook raise from management. We are raising our fair value estimate to $162 per share from $155 and view shares as fairly valued.

Narrow-moat Manhattan Associates reported fourth-quarter results above guidance and our expectations. The firm also raised its outlook for fiscal 2023, driven by a robust demand pipeline for both active transportation management and active warehouse management solutions. We view the combination of Manhattan's cloud-based portfolio, new cloud products and dynamic supply chain environment as uniquely benefitting Manhattan over the next several years. We appreciate the detailed guidance provided for 2023, which we believe reflects management's confidence in business momentum despite macro uncertainty. We maintain our fair value estimate of $155 per share and view the shares as undervalued.

Manhattan Associates is the clear leader in the warehouse management systems (WMS) software niche, in our view. Supply chains are complex and any disruption to warehouse operations could have a significant ripple effect among all nodes in the chain, which is captured in sticky customer relationships. When normalized for COVID-19, we view the company as capable of driving low-double-digit revenue growth annually over the next five years, with earnings growth of approximately 18% during that time. In 2020, Manhattan Associates introduced a cloud version of its flagship warehouse management solution. As a result, we see a yearslong mix shift from on-premises to cloud adoption.

Narrow-moat Manhattan Associates reported third-quarter results above both guidance and our expectations. Management again raised guidance for 2022 for revenue and earnings per share, driven by strength in deployment for both active transportation management and active warehouse management solutions. We believe the combination of Manhattan’s cloud-based portfolio, new cloud products, and persistent global supply chain challenges is uniquely beneficial for the company over the next several years. Given the macro uncertainty, we appreciate the guidance for 2023, which was slightly below our model. We maintain our fair value estimate of $155 per share and view shares as modestly undervalued.

Narrow-moat Manhattan Associates reported second-quarter results that came in ahead of both guidance and our expectations. Management again raised its outlook for 2022, as the cloud transition gains positive momentum for both active transportation management and active warehouse management. We believe Manhattan’s cloud-based portfolio combined with new cloud products and persistent global supply chain challenges leaves the company uniquely poised to benefit over the next several years We appreciate the detailed guidance allowing us to fine-tune our model, which we view as largely in line with management’s outlook. Given upside to results and a constructive outlook, we are increasing our fair value estimate to $155 per share from $149 and view the shares as attractive.

Manhattan Associates is the clear leader in the warehouse management systems, or WMS, software niche, in our view. Supply chains are complex and any disruption to warehouse operations could have a significant ripple effect among all nodes in the chain, which is captured in sticky customer relationships. When normalized for COVID-19, we view the company as capable of driving low-double-digit revenue growth annually over the next five years, with earnings growth of approximately 18% during that time. In 2017, Manhattan Associates introduced cloud versions of its software. We see a years-long mix shift from on-premises to cloud adoption.

Manhattan Associates is the clear leader in the warehouse management systems, or WMS, software niche, in our view. Supply chains are complex and any disruption to warehouse operations could have a significant ripple effect among all nodes in the chain, which is captured in sticky customer relationships. When normalized for COVID-19, we view the company as capable of driving low-double-digit revenue growth annually over the next five years, with earnings growth of approximately 18% during that time. In 2017, Manhattan Associates introduced cloud versions of its software. We see a years-long mix shift from on-premises to cloud adoption.

Narrow-moat Manhattan Associates kicked off fiscal 2022 with record first-quarter results that meaningfully beat guidance and was ahead of our expectations for key metrics. Management raised guidance for 2022 as the move to the cloud intensifies for both active transportation management and active warehouse management. We view Manhattan’s move to the cloud combined with new solutions and ongoing global supply chain issues as uniquely valuable for the company to benefit. With the persistent global challenges, customers are integrating supply chain-related software into their core strategy, placing Manhattan’s superior offerings in demand. We appreciate the detailed guidance allowing us to focus our model, which we view as largely in line with achievable guidance. Based on better results and guidance, we are raising our fair value estimate to $149 per share from $142. Like with much of our software coverage, we view shares as attractive.

Narrow-moat Manhattan Associates reported strong fourth-quarter results that came in nicely ahead of our revenue and adjusted EPS expectations. Management again raised guidance for 2022 as active transportation management gains traction and active warehouse management continues to experience accelerating growth. We see the move to the cloud across the portfolio combined with new cloud products and ongoing global supply chain issues as uniquely benefiting Manhattan. Supply chain-related software is clearly seeing stepped up strategic interest from customers given persistent global challenges. We appreciate the detailed guidance, which allowed us to fine-tune our model over the next couple years, while also rolling our DCF forward a year. We see 2022 as a trough for both growth and margins, with help on the way in the form of a strong pipeline and accelerating win rates. These factors combined drive our fair value estimate to $142 per share, from $127. Given the recent pullback in software, we see shares as about fairly valued.

Manhattan Associates is the clear leader in the warehouse management systems, or WMS, software niche, in our view. Supply chains are complex and any disruption to warehouse operations could have a significant ripple effect among all nodes in the chain, which is captured in sticky customer relationships. When normalized for COVID-19, we view the company as capable of driving low-double-digit revenue growth annually over the next five years, with earnings growth of approximately 18% during that time. In 2017, Manhattan Associates introduced cloud versions of its software. We see a years-long mix shift from on-premises to cloud adoption.

Manhattan Associates is the clear leader in warehouse management systems software, in our view. Supply chains are complex and any disruption to warehouse operations could have a significant ripple effect among all nodes in the chain, which is captured in sticky customer relationships. When normalized for COVID, we view the company as capable of driving 9% to 14% revenue growth annually over the next decade, with earnings growth of approximately 18% during that time. In 2017, Manhattan Associates introduced cloud versions of its software. We see a yearslong mix shift from on-premises to cloud adoption.

Narrow-moat Manhattan Associates reported strong third-quarter results that came in nicely ahead of both guidance and our own revenue and adjusted EPS expectations. Management again raised guidance for fiscal 2021 as active transportation management gains traction and active warehouse management continues to experience accelerating growth. We see the move to the cloud across the portfolio combined with permanently changed consumer shopping patterns and a writhing supply chain as a perfect storm for Manhattan to uniquely benefit. While we have maintained a conservative view on Manhattan’s ability to drive margin expansion apace top line growth over the course of the model transition to the cloud, we consider the newly issued multiyear and detailed financial targets as very helpful and appropriate amidst the secular alignment of its cloud solutions with evolving consumer demands. As a result, we are raising our fair value estimate to $127 per share, from $107, but still recommend investors wait for a better entry point for the stock.