Back to top

Image: Bigstock

Can Manhattan Associates (MANH) Run Higher on Rising Earnings Estimates?

Read MoreHide Full Article

Manhattan Associates (MANH - Free Report) could be a solid choice for investors given the company's remarkably improving earnings outlook. While the stock has been a strong performer lately, this trend might continue since analysts are still raising their earnings estimates for the company.

Analysts' growing optimism on the earnings prospects of this business software company is driving estimates higher, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- is principally built on this insight.

The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.

Consensus earnings estimates for the next quarter and full year have moved considerably higher for Manhattan Associates, as there has been strong agreement among the covering analysts in raising estimates.

The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:

12 Month EPS

Current-Quarter Estimate Revisions

For the current quarter, the company is expected to earn $0.54 per share, which is a change of +5.88% from the year-ago reported number.

Over the last 30 days, the Zacks Consensus Estimate for Manhattan Associates has increased 44.58% because three estimates have moved higher compared to no negative revisions.

Current-Year Estimate Revisions

For the full year, the company is expected to earn $2.03 per share, representing a year-over-year change of +15.34%.

There has been an encouraging trend in estimate revisions for the current year as well. Over the past month, three estimates have moved up for Manhattan Associates versus no negative revisions. This has pushed the consensus estimate 33.73% higher.

Favorable Zacks Rank

Thanks to promising estimate revisions, Manhattan Associates currently carries a Zacks Rank #2 (Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.

Bottom Line

While strong estimate revisions for Manhattan Associates have attracted decent investments and pushed the stock 12.2% higher over the past four weeks, further upside may still be left in the stock. So, you may consider adding it to your portfolio right away.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Manhattan Associates, Inc. (MANH) - free report >>

Published in