Yahoo Finance Why Manhattan Associates (MANH) Stock Is Trading Up Today
What Happened:
Shares of supply chain optimization software maker Manhattan Associates (NASDAQ:MANH) jumped 11.4% in the afternoon session after the company reported second-quarter earnings results: Manhattan Associates materially improved its gross margin this quarter. Its revenue and EPS also outperformed Wall Street's estimates. Overall, this quarter seemed fairly positive, and shareholders should feel optimistic.
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What is the market telling us:
Manhattan Associates's shares are somewhat volatile and over the last year have had 3 moves greater than 5%. But moves this big are very rare even for Manhattan Associates and that is indicating to us that this news had a significant impact on the market's perception of the business.
The biggest move we wrote about over the last year was 6 months ago, when the stock gained 13.1% on the news that the company reported a "beat and raise" quarter. Fourth quarter results exceeded expectations for revenue, EPS, and free cash flow. Gross margin also improved.
Notably, Remaining performance obligations (RPO - leading revenue indicator) grew by 36% at the end of the year. However, its revenue guidance for next year suggests a significant slowdown in demand, but we can't be too negative because it exceeded Wall Street analysts' expectations. In addition, the company raised the full-year RPO guidance to $1.78 billion at the midpoint (versus the previous guidance of $1.75 billion). Similarly, FY'24 operating margin guidance was raised. Overall, this was a really good quarter that should please shareholders.
Manhattan Associates is up 20.4% since the beginning of the year, and at $249.45 per share it is trading close to its 52-week high of $266.03 from March 2024. Investors who bought $1,000 worth of Manhattan Associates's shares 5 years ago would now be looking at an investment worth $2,904.
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