Manhattan Associates Q3 Earnings: Is NasdaqGS:MANH Expensive at 41.5x Price/Book?

in EARNINGS/INVESTING IDEAS by

Manhattan Associates, Inc. (NasdaqGS:MANH) is scheduled to report Q3 earnings results after markets close for trading on October 22, 2020.

The company is expected to report earnings of $0.39/share on revenue of $138.8 million. The consensus earnings per share (EPS) of $0.39/share is based on a poll of 7 analysts and represents a decline in eps of −23.0% over the same quarter last year, when the company reported earnings of $0.51/share.

The revenue forecast of $138.8 million based on a poll of 7 analysts implies a year-over-year (YoY) decline in revenue of −14.5%. Last year the company reported $162.3 million in revenue for the quarter.

Expected to report EPS contraction of −23.0% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $138.81 $162.28 −14.5%
EPS $0.39 $0.51 −23.0%

Earnings Call Trends

Management has been great at managing analyst expectations historically. The company has a perfect record over the last 8 tracked quarters of exceeding earnings guidance.

What are your expectations from Manhattan Associates, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.34 $0.40 16.5% Beat
Q1, 2020 $0.33 $0.40 22.7% Beat
Q4, 2019 $0.31 $0.40 29.0% Beat
Q3, 2019 $0.36 $0.51 41.7% Beat
Q2, 2019 $0.34 $0.42 21.7% Beat
Q1, 2019 $0.34 $0.41 20.6% Beat
Q4, 2018 $0.37 $0.46 24.3% Beat
Q3, 2018 $0.40 $0.49 22.5% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by falling −1.0%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 23, 2020 $96.43 $95.42 −1.0% Decline
April 21, 2020 $55.35 $58 4.8% Increase
February 4, 2020 $87.22 $78.12 −10.4% Decline
October 22, 2019 $76.51 $74.78 −2.3% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −3.03, the model suggests that the company is not likely to be an earnings manipulator. A value of −3.03 implies a 0.1% chance of earnings manipulation.

Fundamentals And Technical Analysis

Manhattan Associates, Inc. is currently trading at $99.88/share, down −2.0% for the day. The company is trading at approximately 94.1% of its 52-week high of $106.17/share. The company’s stock price is up 4.7% since the last earnings report and down −4.0% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 52.91 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:MANH Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 74.12 and a forward P/E multiple of 65.94.

Manhattan Associates, Inc.’s current share price also implies a price-to-book (P/B) multiple of 41.53. The following table summarizes some other key fundamental ratios:

Data as of October 20, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $99.88
P/E Ratio 74.1x
P/E Ratio (Fwd) 65.9x
PEG Ratio −8.0
Total Debt / Total Capital 0.5%
Levered Free Cash Flow $121.2 million
EV / EBITDA 52.2x

Finbox

Manhattan Associates, Inc. is a mid-cap stock with a market capitalization of $6.345 billion and a total enterprise value of $6.256 billion. The company operates in the Information Technology sector and the Software industry.

Manhattan Associates, Inc. develops, sells, deploys, services, and maintains software solutions to manage supply chains, inventory, and omni-channel operations for retailers, wholesalers, manufacturers, logistics providers, and other organizations. The company offers Manhattan SCALE, a portfolio of logistics execution solutions that provide trading partner management, yard management, optimization, warehouse management, and transportation execution services; and Manhattan Active, a set of enterprise and store omni-channel solutions. It also provides inventory optimization and planning solutions; maintenance services comprising customer support services and software enhancements; professional services, such as solutions planning and implementation, and related consulting services; and training and change management services. In addition, the company resells computer hardware, radio frequency terminal networks, radio frequency identification chip readers, bar code printers and scanners, and other peripherals. It offers products through direct sales personnel, as well as through partnership agreements with various organizations. The company operates in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. Manhattan Associates, Inc. was founded in 1990 and is headquartered in Atlanta, Georgia.

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