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On Monday, Truist Securities expressed continued confidence in Manhattan Associates, Inc. (NASDAQ:MANH), maintaining a Buy rating and a price target of $285.00. Currently trading at $176.36, the stock has experienced significant volatility, having declined over 31% in the past six months. According to InvestingPro data, the company maintains strong profitability with a gross margin of nearly 55%. Following recent investor meetings with company management, analysts at Truist Securities have reaffirmed their positive stance on the company’s prospects. They cited Manhattan Associates’ cloud innovation cycle as a key driver of cloud bookings traction. The company’s financial health appears robust, with InvestingPro analysis showing an impressive return on equity of 76% and moderate debt levels.
The firm’s analysts believe that Manhattan Associates is gaining momentum through its ability to sell its supply chain and omni-channel commerce unification story, particularly to large Tier 1 companies that are selecting Manhattan Associates as their platform vendor across various workloads. Additionally, the analysts highlighted the company’s emerging point-of-sale (POS) and planning solutions as significant contributors to the long-term business model, which they expect will help sustain over 20% growth in Software (ETR:SOWGn) as a Service (SaaS) revenue.
Despite recent issues in the professional services segment, Truist Securities anticipates this to be a cyclical and transitory setback. They project that this segment will return to growth by 2026. The firm’s stance on Manhattan Associates remains unchanged, as they reiterated their Buy rating and $285 price target. The analysts’ confidence is rooted in the company’s innovative cloud strategies and expanding solution offerings, which they believe will continue to drive growth and fortify Manhattan Associates’ market position. With revenue growth of 12.2% in the last twelve months and a strong track record of profitability, the company shows promising fundamentals. For deeper insights into Manhattan Associates’ valuation and growth prospects, including 16 additional ProTips and comprehensive financial analysis, visit InvestingPro.
In other recent news, Manhattan Associates has announced a significant leadership transition with President and CEO Eddie Capel set to retire on February 12, 2025. Capel will transition to the role of Executive Vice-Chairman of the Board, while Eric Clark, currently CEO of NTT Data North America, will succeed him. William Blair analyst Dylan Becker upgraded Manhattan Associates’ stock rating from Market Perform to Outperform, citing the company’s strong position in the supply chain software market and its transition towards subscription-based services. Raymond (NSE:RYMD) James and Truist Securities have maintained their positive outlooks on the company, with price targets of $270 and $285, respectively, reflecting confidence in the company’s strategic direction and leadership change.
During Capel’s tenure, Manhattan Associates has seen substantial growth, particularly in technology and cloud innovation, which has been acknowledged by analysts. The leadership transition follows a two-year succession planning process, ensuring continuity and strategic alignment. Eric Clark’s appointment is expected to build on the company’s achievements, given his extensive experience at prominent technology firms. Despite the leadership change, analysts like Brian Peterson from Raymond James remain optimistic about the company’s future under Clark’s leadership. Investors are closely monitoring these developments, especially given the company’s resilience in subscription bookings and cloud pipeline.
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