Baird has increased the price target for Manhattan Associates, Inc. (NASDAQ: NASDAQ:MANH) to $304, up from the previous target of $263, while maintaining an Outperform rating on the stock.
The revision comes as the company is set to report its third-quarter earnings today.
The analyst from Baird expressed continued confidence in Manhattan Associates' prospects for upward estimate revisions heading into fiscal year 2025.
Despite anticipating a potential temporary consolidation of the stock's price due to its robust post-second-quarter performance, the analyst's outlook remains positive.
Manhattan Associates experienced a notable rise in its stock price following the second-quarter results of 2024, which surpassed the cautious short-term expectations at the time. This performance has set a high bar for the company's stock trajectory moving forward.
The third-quarter earnings report is expected to include preliminary guidance for the upcoming year. The analyst anticipates that the management will adhere to a pattern similar to previous years, beginning with a conservative forecast that has the potential for upward revisions as cloud bookings increase and as the company capitalizes on its existing backlog.
In other recent news, Manhattan Associates has been experiencing robust financial growth, marked by a 15% surge in total revenue to $265 million and a 34% rise in adjusted earnings per share to $1.18.
The company's cloud revenue expanded by 35%, and services revenue saw a 10% increase. Furthermore, Manhattan Associates' Remaining Performance Obligations (RPO) grew by 29%, surpassing projected growth. This positive financial performance has been attributed to its strong Warehouse Management Systems (WMS) and effective sales execution strategies.
Truist Securities and Loop Capital have both upheld their Buy ratings on the company's stock. Truist Securities increased its price target for Manhattan Associates to $310, citing the company's long-term growth potential and reinforced standing as a strategic supplier for significant transformation projects. Similarly, Loop Capital raised its price target to $265, attributing the company's strong performance to its modern product offerings and effective sales execution.
Manhattan Associates has also been making strides in product innovation, with the recent release of Manhattan Active Maven and Manhattan Active Supply Chain Planning. Despite some deal delays, the company's commitment to innovation and strategic positioning suggests a positive financial outlook.
Looking ahead, Manhattan Associates expects full-year 2024 revenue to fall between $1.036 billion and $1.044 billion, representing a growth of 17%.
InvestingPro Insights
As Manhattan Associates (NASDAQ:MANH) prepares to report its third-quarter earnings, InvestingPro data and tips offer additional context to Baird's optimistic outlook. The company's market capitalization stands at $18.1 billion, reflecting its significant presence in the software industry.
InvestingPro Tips highlight that MANH is trading near its 52-week high, with a strong return of 55.18% over the last year. This aligns with Baird's observation of the stock's robust post-second-quarter performance. The company's revenue growth of 17.49% in the last twelve months as of Q2 2024 supports the analyst's confidence in Manhattan Associates' growth trajectory.
However, investors should note that MANH is trading at a high P/E ratio of 88.11, which could indicate that the stock is priced for high growth expectations. This valuation metric underscores the importance of the upcoming earnings report and management's guidance for fiscal year 2025.
For readers seeking a deeper dive into Manhattan Associates' financial health and market position, InvestingPro offers 17 additional tips, providing a comprehensive analysis to inform investment decisions.
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