(MANH - Free Report
is a Zacks #1 Rank (Strong Buy) after posting three solid earnings
surprises and gets higher estimates for 2012.
Manhattan Associates develops and provides supply chain software
solutions for the planning and execution of supply chain
activities. The company offers two platform based software
solutions. Manhattan SCOPE focuses on planning and forecasting,
inventory optimization, order lifecycle management, transportation
lifecycle management, and distribution management. Manhattan SCALE
is a portfolio of logistics execution solutions.
Three Straight Beats Lead to Stock Appreciation
MANH has topped the Zacks Consensus Estimate in each of the last
three quarters with the average surprise coming in on average 36%
ahead of expectations. These beats have slowed in absolute and
percentage terms, but still have produced some solid gains in the
share price as a result.
Moves of 12%, 11% and 7% respectively accompanied each of the last
three beats. The previous four reports did include a lone
earnings miss but saw shares sink following earnings reports, but
not by much. Shares fell 1.6% or less in the three of those four
MANH Recently Reported Earnings
On January 31, 2012 the company reported revenue of $84 million up
from $72 million in the year ago period. In addition, earnings per
share came in at $0.50 up from $0.29 posted a year ago and $0.09
ahead of the Zacks Consensus Estimate.
Earnings Estimates Bumped Up
Following the most recent earnings report, analysts bumped up
their earnings estimates for 2012. The Zacks Consensus Estimate
for 2012 EPS moved from $2.11 in mid-January 2012 to the current
level of $2.24.
MANH has a pretty high valuation any way you look at it. The
company trades at 20x forward earnings, a premium to the industry
average of 14.6x and 23x trailing earnings compared to a 20x
multiple for the industry average. Price to book of 5.8x is also
a premium to the 4x industry average. Price to sales shows MANH
trading at a discount to the industry average, but still holds a
high 2.9x multiple which is less than the 3.5x industry average.
A quick look at the price and consensus chart shows that MANH has
seen more confidence from analysts. As earnings estimates
increase, we see the stock follow the lead, and the gap between
the estimates and price indicate that the stock may be
undervalued. MANH is a Zacks #1 Rank (Strong Buy).
Brian Bolan is the Aggressive Growth Stock Strategist
Zacks.com. He is also the Editor in charge of the Zacks Home Run Investor