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Today I will take a look at Manhattan Associates, Inc.'s (NASDAQ:MANH) most recent earnings update (31 March 2019) and compare these latest figures against its performance over the past few years, as well as how the rest of the software industry performed. As an investor, I find it beneficial to assess MANH’s trend over the short-to-medium term in order to gauge whether or not the company is able to meet its goals, and ultimately sustainably grow over time.
How Well Did MANH Perform?
MANH's trailing twelve-month earnings (from 31 March 2019) of US$103m has declined by -7.1% compared to the previous year.
Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 7.1%, indicating the rate at which MANH is growing has slowed down. Why could this be happening? Well, let's look at what's occurring with margins and if the whole industry is facing the same headwind.
In terms of returns from investment, Manhattan Associates has invested its equity funds well leading to a 71% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 28% exceeds the US Software industry of 6.1%, indicating Manhattan Associates has used its assets more efficiently. However, its return on capital (ROC), which also accounts for Manhattan Associates’s debt level, has declined over the past 3 years from 91% to 69%.
What does this mean?
Though Manhattan Associates's past data is helpful, it is only one aspect of my investment thesis. Companies that are profitable, but have capricious earnings, can have many factors impacting its business. I recommend you continue to research Manhattan Associates to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for MANH’s future growth? Take a look at our free research report of analyst consensus for MANH’s outlook.
- Financial Health: Are MANH’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 March 2019. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.