Manhattan Associates Inc MANH

AI Uncertainty Weakens Software Moats but Does Not Disrupt Manhattan’s Supply Chain Leadership

Manhattan Associates is the clear leader in the warehouse management systems software niche, in our view. Supply chains are complex, and any disruption to warehouse operations can have a significant ripple effect across the entire chain, as evidenced by 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 even better earnings growth. Manhattan Associates is building on its lead with cloud versions of its software solutions, which have also brought about margin expansion and accelerated growth, which we think will lead to improved returns.