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Manhattan Associates Inc

MANH

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Manhattan Associates Inc AI Insights

Informational only. Not investment advice.
As of 2025-12-17

Snapshot

  • ROIC of 63% TTM vs industry median -0.5% - capital efficiency is exceptional with minimal invested capital (309M) generating 216M net income[Return on Invested Capital]
  • FCF of 333M TTM on 1.07B revenue (31% FCF margin) with capex only 14M - asset-light model converts nearly all profit to cash[Free Cash Flow]
  • P/E of 49.5x vs industry median 29.6x and P/S of 10.1x vs median 3.9x - premium valuation demands continued execution[P/E Ratio]

Watch Triggers

  • Operating Margin: Falls below 22%Current 26% margin is core to valuation; compression signals pricing pressure or cost inflation
  • Free Cash Flow: FCF/Net Income drops below 1.2xCurrent 1.5x conversion ratio validates earnings quality; deterioration flags working capital issues
  • Total Revenue: Growth decelerates below 8%Premium multiple requires double-digit growth; deceleration triggers multiple compression

Bull Case

ROE of 74% TTM with minimal leverage (0.15 D/E) indicates genuine operating excellence, not financial engineering. Asset turnover 1.45x shows efficient capital deployment.

ROEDebt to EquityAsset Turnover

R&D at 13% of revenue (140M TTM) sustains product moat in supply chain software while maintaining 26% operating margins - rare combination.

R&D ExpenseOperating Margin

Bear Case

EPS declined 6.8% YoY despite stable operations - multiple compression risk if growth decelerates further at current 49.5x P/E.

EPS Growth 1YP/E Ratio

P/B of 43.5x implies market expects sustained hypergrowth - any margin or revenue miss could trigger sharp derating.

P/B RatioP/S Ratio

Bull vs Bear Balance

AI-generated sentiment analysis based on fundamental metrics and market conditions.

BearBull
55%

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Forward Thesis

FCF margin sustains 30%+ as cloud transition matures, funding aggressive buybacks

1-3yhigh
  • Capex under 2% of revenue with no major infrastructure needs
  • Operating margin 26% TTM with scale leverage on fixed costs
  • 51.5M TTM buybacks at 0.15x debt/equity leaves capacity
FCF 333M vs Net Income 216M (1.5x conversion)Cash 264M vs Total Debt 48MOperating Cash Flow 347M TTM

Valuation Context

Caveats

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Fundamental company data provided by Morningstar, updated daily.

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