Is this U.S.-China selloff a buy? A top Wall Street voice weighs in
On Wednesday, Loop Capital Markets adjusted its price target for Manhattan Associates, Inc. (NASDAQ:MANH), a $13.76 billion market cap provider of supply chain and omnichannel commerce solutions. According to InvestingPro data, the company maintains a "GREAT" financial health score, reflecting its strong market position and operational efficiency. The firm’s analyst, Mark Schappel, reduced the price target from $310.00 to $275.00 but maintained a Buy rating on the company’s shares. The revision followed Manhattan Associates’ mixed performance in the December quarter, which included both positive and negative developments.
The company’s report revealed that it had added $127 million in net new Remaining Performance Obligations (RPO) on a constant currency basis, surpassing both Loop Capital’s estimates and the management’s previous guidance by $13 million. This performance aligns with the company’s robust revenue growth of 12.23% over the last twelve months, as reported by InvestingPro. However, foreign currency fluctuations negatively impacted the as-reported RPO by $33 million. Additionally, several customers deferred their services implementation projects due to macroeconomic concerns, prompting the management to revise downward its 2025 projections for total revenue and non-GAAP earnings per share (EPS).
As a result of these announcements, Manhattan Associates’ stock experienced a significant decline of 24% in after-hours trading. Despite the setbacks, Loop Capital expressed continued confidence in the company. Schappel commented on the situation, stating, "While we were obviously disappointed in the pushed services implementations and the guide, we likewise were surprised by the magnitude of the panic selling."
Loop Capital’s decision to retain a Buy rating is based on the belief that the lowered guidance primarily affects the services side of Manhattan Associates’ business, rather than its core software operations. The firm views the current dip in share price as an opportunity for investors to acquire MANH shares amidst the market’s reaction, considering the company an exceptional franchise and one of the top performers in enterprise software, with a strong cloud migration narrative.
In conclusion, Loop Capital reaffirms its positive stance on Manhattan Associates, seeing the company as a key long-term investment, despite the reduced price target reflecting the immediate challenges faced by the company. While current analyst targets range from $230 to $310, InvestingPro’s comprehensive analysis suggests the stock is trading slightly above its Fair Value. Investors seeking deeper insights can access the detailed Pro Research Report, available exclusively to subscribers, which provides extensive analysis of MANH’s valuation metrics, growth prospects, and competitive position among 1,400+ top US stocks.
In other recent news, Manhattan Associates Inc. has been the subject of recent analyst adjustments. Truist Securities reduced the company’s stock target to $285, maintaining a Buy rating, while Citi cut the target to $244, retaining a Neutral stance. These changes follow 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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