Manhattan Associates, Inc. (MANH: 24.67 +0.22 +0.90%) recently rebounded from a key trend line after reporting better than expected Q4 results that included an 8% earnings surprise as the company’s business improved with a stronger economy.
Company Description
Manhattan Associates, Inc. develops and sells supply chain software solutions for a wide range of industries worldwide. The company was founded in 1995 and has a market cap of $551 million.
Fourth-Quarter Results
Manhattan’s Q4 results on Feb 2 demonstrate the company’s significant progress in the second half of 2009 as the economy continued to improve. Although sales were down from last year, earnings came in 2 cents ahead of the Zacks Consensus Estimate at 8 cents per share. The company has surprised or matched the consensus in each of the last four quarters by an average of 11 cents, or 88%.
After suffering from a challenging first half of 2009, the company saw its business gain traction in the second half of the year, with total license revenue improving to $26 million from just $9 million. Manhattan’s customers also felt more comfortable spending on big-ticket projects, with three million-dollar deals signed in Q3 and two more in Q4 after seeing none in the first half of the year.
Manhattan continues to enjoy fat margins in its services division, creeping up 2% from last year to 53%. Strong operating cash flow helped improve the company’s balance sheet, with cash and short-term investments jumping to $123 million from $89 million last year.
Estimates Advance
Analysts boosted estimates on the promising quarter, with the current year adding three cents to 89 cents per share. The next-year estimate is pegged at $1.10, a solid 23% growth projection.
Valuation
In light of recent gains, this stock isn’t exactly cheap, trading with a forward P/E multiple of 27X, a premium to the overall market.
The Chart
Shares of MANH recently raced back to the 52-week high after rebounding from the key trend line at $21, take a look below.
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