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On Wednesday, Raymond (NSE:RYMD) James made a significant adjustment to the price target for Manhattan Associates, Inc. (NASDAQ:MANH), reducing it to $195 from the previous $270. Despite this change, the firm maintained its Outperform rating on the stock. The revision follows Manhattan Associates’ first-quarter results of 2025, which surpassed the low expectations set against a backdrop of broader economic and tariff concerns. The company’s performance led to a rise in its shares in after-hours trading. According to InvestingPro data, the stock has experienced a significant decline of over 40% in the past six months, though it maintains a "GOOD" Financial Health score, suggesting resilient fundamentals despite market pressures.
Brian Peterson of Raymond James highlighted that the company’s bookings remained robust, despite some challenges related to contract durations and foreign exchange impacts. He noted that the financial guidance might effectively be lower by approximately $15 million when excluding the positive effects of currency fluctuations. However, he suggested that market expectations might have been prepared for a more negative outlook. Peterson pointed out that while there are still uncertainties in the services sector, this could be attributed to macroeconomic factors and timing rather than fundamental issues with Manhattan Associates itself. The company’s solid fundamentals are reflected in its impressive 54.82% gross profit margin and 12.23% revenue growth over the last twelve months, as reported by InvestingPro.
The analyst also mentioned that while the current macroeconomic headlines are shifting, it is premature to conclude that the company has reached a fundamental low point. There could be further pressures on the company’s shares and financial estimates. Nonetheless, Peterson expressed confidence in the company’s robust Remaining Performance Obligations (RPO) and believes that these should reassure investors with a long-term perspective. He anticipates a conservative stance going into 2026 and envisions a more stable environment for the company’s services.
Peterson’s stance is buoyed by several factors that he believes make Manhattan Associates an attractive investment for those with a long-term view. He commended the company’s strong management team, solid competitive position, and the potential for increased monetization as the company continues its transition to cloud-based solutions. Despite the reduced price target, the analyst’s outlook for Manhattan Associates remains positive for investors willing to look beyond the current cyclical economic dynamics. For a comprehensive analysis of Manhattan Associates’ investment potential, including 12 key ProTips and detailed valuation metrics, investors can access the full Pro Research Report available on InvestingPro, which provides deep-dive analysis of this and 1,400+ other US stocks.
In other recent news, Manhattan Associates Inc. reported its first-quarter 2025 earnings, surpassing analysts’ expectations. The company achieved an adjusted earnings per share (EPS) of $1.19, beating the forecasted $1.03, and reported revenue of $263 million, exceeding the projected $256.63 million. Cloud revenue saw a significant boost, increasing by 21% to $94 million, which contributed to the overall revenue growth. The adjusted operating margin improved to 34.7%, up 340 basis points, reflecting strong operational efficiency. Manhattan Associates also set an ambitious revenue target for the full year 2025, aiming for $1.060-$1.070 billion, with a cloud revenue goal of $405-$410 million. Analysts from Truist Securities and Raymond James have noted the company’s solid performance and strong pipeline, indicating confidence in its strategic direction. Additionally, Manhattan Associates was recently named Google (NASDAQ:GOOGL)’s Cloud Business Applications Partner of the Year for Supply Chain and Logistics, highlighting its role as an innovator in the industry. Despite macroeconomic uncertainties, the company remains optimistic about its growth prospects, supported by a robust pipeline and competitive positioning.
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