DA Davidson ha sincreased its price target for Manhattan Associates, Inc. (NASDAQ: NASDAQ:MANH) from $285.00 to $315.00 while maintaining a Buy rating on the stock.
This adjustment follows the company's third-quarter results for the fiscal year 2024, which exhibited ongoing strength in demand and solid initial revenue performance obligations (RPO) for the year 2025.
The analyst at DA Davidson highlighted Manhattan Associates' consistent performance and the potential for revenue and margin growth. The firm's initial 2025 financial parameters suggest significant upward potential, especially as contributions from Point of Sale (POS) and Planning solutions are yet to be fully realized. The Planning solution has recently gone live, and the company anticipates several clients to start adopting it in mid-2025.
Manhattan Associates' Return on Invested Capital (ROIC), which stands at an impressive 136%, was noted as the highest in the software industry. This metric underscores the company's efficient use of capital to generate profits.
In other recent news, Manhattan Associates reported a 15% increase in total revenue to $265 million and a 34% rise in adjusted earnings per share to $1.18. The company's cloud revenue expanded by 35%, and services revenue saw a 10% increase.
Additionally, Manhattan Associates' Remaining Performance Obligations (RPO) grew by 29%, surpassing projected growth. These financial developments are attributed to its robust Warehouse Management Systems (WMS) and effective sales execution strategies.
Baird, Truist Securities, and Loop Capital have all maintained positive ratings on Manhattan Associates, with Baird raising its price target to $304, Truist to $310, and Loop Capital to $265. These firms have expressed confidence in Manhattan Associates' long-term growth potential and strategic positioning.
Manhattan Associates has also been active in product innovation, recently introducing Manhattan Active Maven and Manhattan Active Supply Chain Planning. Looking forward, the company projects its full-year 2024 revenue to fall between $1.036 billion and $1.044 billion, indicating a growth of 17%.
InvestingPro Insights
Manhattan Associates' strong performance and growth potential, as highlighted by DA Davidson, are further supported by recent InvestingPro data. The company's revenue growth of 17.49% over the last twelve months and a robust EBITDA growth of 31.91% in the same period underscore its solid financial trajectory. These figures align with the analyst's positive outlook on the company's revenue and margin growth potential.
InvestingPro Tips reveal that Manhattan Associates is trading near its 52-week high, which is consistent with the stock's strong performance. The company's high return over the last year, with a one-year price total return of 58.52%, reflects investor confidence in its business model and growth prospects.
It's worth noting that while Manhattan Associates shows promising growth, it's currently trading at a high P/E ratio of 88.41. This valuation suggests that investors have high expectations for the company's future performance, which aligns with the analyst's optimistic view on the potential of new solutions like POS and Planning.
For investors seeking a more comprehensive analysis, InvestingPro offers 13 additional tips for Manhattan Associates, providing a deeper understanding of the company's financial health and market position.
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