Last week, you might have seen that Manhattan Associates, Inc. (NASDAQ:MANH) released its full-year result to the market. The early response was not positive, with shares down 8.2% to US$78.42 in the past week. The result was positive overall - although revenues of US$618m were in line with what analysts predicted, Manhattan Associates surprised by delivering a statutory profit of US$1.32 per share, modestly greater than expected. Earnings are an important time for investors, as they can track a company's performance, look at what top analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what analysts' statutory forecasts suggest is in store for next year.
Taking into account the latest results, the current consensus from Manhattan Associates's five analysts is for revenues of US$651.4m in 2020, which would reflect an okay 5.4% increase on its sales over the past 12 months. Statutory earnings per share are forecast to descend 13% to US$1.15 in the same period. Yet prior to the latest earnings, analysts had been forecasting revenues of US$649.6m and earnings per share (EPS) of US$1.13 in 2020. Analysts seem to have become more bullish on the business, judging by their new earnings per share estimates.
Analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 7.6% to US$104. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Manhattan Associates, with the most bullish analyst valuing it at US$110 and the most bearish at US$100.00 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that analysts have a clear view on its prospects.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. Analysts are definitely expecting Manhattan Associates's growth to accelerate, with the forecast 5.4% growth ranking favourably alongside historical growth of 2.4% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 12% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, analysts also expect Manhattan Associates to grow slower than the wider market.
The Bottom Line
The biggest takeaway for us from these new estimates is that the consensus upgraded its earnings per share estimates, showing a clear improvement in sentiment around Manhattan Associates's earnings potential next year. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Manhattan Associates's revenues are expected to perform worse than the wider market. Analysts also upgraded their price target, suggesting that analysts believe the intrinsic value of the business is likely to improve over time.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Manhattan Associates analysts - going out to 2022, and you can see them free on our platform here.
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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.
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