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On Wednesday, DA Davidson adjusted their financial outlook on Manhattan Associates stock (NASDAQ:MANH), reducing the price target from $315.00 to $270.00. Despite this change, the firm maintains a Buy rating on the shares. The reevaluation follows the company’s recent earnings report, which prompted a reassessment of future expectations and market valuation metrics. According to InvestingPro data, the company currently trades at a P/E ratio of 83, reflecting its premium valuation in the market.
The analyst from DA Davidson, Gil Luria, stated their continued confidence in Manhattan Associates, emphasizing the company’s enduring value. Luria’s remarks highlighted the belief that the enterprise’s worth had not diminished by a quarter following the earnings announcement, even though the after-hours trading price was noted at $220. InvestingPro analysis shows the company maintains a "GREAT" financial health score, with particularly strong profitability metrics including a 76% return on equity.Want deeper insights? InvestingPro offers 13 additional investment tips for Manhattan Associates, along with comprehensive valuation metrics in the Pro Research Report.
The revised price target of $270 represents a balance between tempered expectations and the effect of multiple compression, a term that refers to the reduction of a stock’s valuation multiple due to various market factors. This adjustment also takes into account the company’s financial performance and market conditions.
A significant detail from the report is the anticipated 20% growth in subscription revenue after 2025. This projection is a key factor in DA Davidson’s analysis, contributing to their valuation of Manhattan Associates. The company has already demonstrated strong growth momentum, with revenue increasing by 12.23% over the last twelve months to $1.04 billion.
In terms of valuation metrics, DA Davidson bases their price target on a 45x EBITDA and 14x sales multiplier. These figures reflect the firm’s methodology for determining the fair market value of Manhattan Associates stock, even with the revised expectations.
In other recent news, Manhattan Associates Inc. has seen multiple adjustments in its stock target by various firms. Loop Capital cut its target to $275, Truist Securities to $285, and Citi to $244. Despite these cuts, all firms maintained a positive outlook on the company’s shares. The adjustments followed Manhattan Associates’ recent fourth-quarter earnings report and 2025 outlook. The company reported a 7.3% YoY revenue increase to $255.8 million, surpassing analyst expectations, and adjusted earnings per share of $1.17. However, the 2025 outlook presented a less optimistic picture with a full-year EPS guidance of $4.45-$4.55, falling short of the $4.61 analyst consensus. Revenue guidance of $1.06-1.07 billion slightly exceeded the $1.04 billion estimate.
Cloud subscription revenue for the quarter saw a significant 26.5% YoY increase to $90.3 million. The company also reported record bookings, with remaining performance obligations (RPO) growing 25% YoY to $1.78 billion. Additionally, Manhattan Associates engaged in stock repurchasing, buying back 155,444 shares for $43.5 million during the quarter. These are among the recent developments for Manhattan Associates.
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