On Thursday, Manhattan Associates, Inc. (NASDAQ: NASDAQ:MANH) received an upgraded rating from DA Davidson, shifting from Neutral to Buy. The firm also increased the company's price target to $240, up from the previous $220. The decision to upgrade the stock comes in the wake of what DA Davidson perceives as an excessive correction this year, particularly after Manhattan Associates reported a quarter that surpassed expectations and provided an improved outlook.
Despite a reported Revenue Performance Obligation (RPO) that may not have met the highest expectations, DA Davidson notes that when adjusted for foreign exchange (FX) impacts, the RPO is on track to meet the end-of-2024 target, with sustained strong demand. The analyst points out that Manhattan Associates is currently trading below its three-year bottom quartile forward Price-to-Earnings (P/E) ratio, suggesting an appealing buying opportunity.
The price target boost to $240 is justified by the belief that Manhattan Associates, as a definitive Return on Invested Capital (ROIC) leader, warrants greater recognition in the market. The upgrade and new price target reflect confidence in the company's performance and market position.
Manhattan Associates has demonstrated financial resilience by exceeding expectations and revising its future guidance upwards. This performance, particularly in light of broader market corrections, has positioned the company favorably in the eyes of DA Davidson.
InvestingPro Insights
Following the rating upgrade by DA Davidson, Manhattan Associates (NASDAQ: MANH) presents a compelling case for investors seeking growth opportunities. According to real-time data from InvestingPro, the company boasts a robust revenue growth of 18.92% over the last twelve months as of Q1 2024, signaling strong business momentum. Additionally, the firm's high operating income margin of 22.91% in the same period underscores its efficiency in translating sales into profits.
InvestingPro Tips reveal that analysts are optimistic about Manhattan Associates' earnings, with 7 analysts revising their earnings upwards for the upcoming period, a testament to the company's potential for continued financial performance. Despite recent market volatility, as indicated by a 10.47% decline in the 1-week price total return and a 16.98% drop over the last month, the stock's 35.13% 1-year price total return reflects its longer-term resilience.
For those interested in deeper analysis, InvestingPro offers additional insights and metrics on Manhattan Associates, with more tips available to guide investment decisions. Investors can access these valuable resources by using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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