How Investors May Respond To Manhattan Associates (MANH) Slower Billings Growth and Margin Pressures

• In its latest quarterly update, Manhattan Associates reported Q2 billings of US$270.2 million with average annual growth of 5.7%, while analyst consensus now projects just 4.1% revenue expansion over the coming 12 months.
• Profitability remains pressured by higher infrastructure costs, resulting in gross margins well below most software peers and fueling concerns around customer retention and demand sustainability.
• We will examine how muted billings growth and margin pressures may influence the company's long-term investment narrative and expectations.

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Manhattan Associates Investment Narrative Recap

To be invested in Manhattan Associates, one needs confidence in accelerating cloud adoption and sustained product innovation as drivers of recurring, higher-margin revenues. However, the recent slowdown in billings growth and persistent margin pressures highlighted in the latest update cast doubt on near-term momentum, raising the importance of evidence that customer retention and demand will remain resilient; the main short-term catalyst is continued cloud conversion, while the biggest immediate risk is muted billings growth extending into future quarters.

Among recent announcements, the deployment of the Manhattan Active Warehouse Management platform at Giant Eagle’s largest facility stands out, reflecting ongoing customer wins despite concerns around slowing billings. Such customer implementations are integral to supporting cloud revenue growth and offsetting risks tied to slower transitions and margin headwinds.

In contrast, one risk that investors should be aware of is the company’s exposure to time and material services contracts if customers defer or delay project work…

Read the full narrative on Manhattan Associates (it's free!)

Manhattan Associates' narrative projects $1.3 billion in revenue and $297.9 million in earnings by 2028. This requires 7.3% yearly revenue growth and a $76.7 million earnings increase from $221.2 million today.

Uncover how Manhattan Associates' forecasts yield a $227.89 fair value, a 6% upside to its current price.

Exploring Other Perspectives

Seven members of the Simply Wall St Community estimate Manhattan Associates' fair value between US$578 and US$5,782 per share, spanning a wide spectrum of outlooks. Many remain focused on the uncertain pace of cloud migrations, a key factor shaping both short-term revenue and longer-term earnings visibility, consider reviewing a variety of perspectives before making your own assessment.

Explore 7 other fair value estimates on Manhattan Associates - why the stock might be a potential multi-bagger!

Build Your Own Manhattan Associates Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Manhattan Associates research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Manhattan Associates research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Manhattan Associates' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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