What Happened?
Shares of supply chain software provider Manhattan Associates (NASDAQ: MANH) fell 2.6% in the morning session after the company reported third-quarter results that beat Wall Street's expectations but revealed a slowdown in a key future growth metric.
Manhattan Associates surpassed revenue and profit estimates for its third quarter, posting revenue of $275.8 million and adjusted earnings per share of $1.36. Despite the beats and management raising its full-year guidance for both revenue and profit, investors focused on a key indicator of future business. The company's RPO (Remaining Performance Obligations) bookings growth, which represents future contracted work, decelerated to 23% year-over-year from 26% in the prior quarter. This slowdown in forward-looking growth appeared to overshadow the strong quarterly performance, suggesting that investors were concerned about future demand.
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What Is The Market Telling Us
Manhattan Associates’s shares are somewhat volatile and have had 13 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 12 days ago when the stock dropped 2.9% as President Trump threatened to increase import taxes on Chinese goods, reigniting trade war fears.
The threat was in response to China's move to restrict its exports of rare earth minerals, which are critical to high-tech manufacturing in the U.S. The unexpected announcement shattered a monthslong calm on Wall Street, sending major indices tumbling. The S&P 500 dropped around 1.3%, while the tech-heavy Nasdaq Composite fell 2.7%. Investors reacted by selling off stocks, particularly in the technology and retail sectors, amid concerns that escalating trade tensions could disrupt global supply chains and increase costs for companies.
Manhattan Associates is down 25.3% since the beginning of the year, and at $200.83 per share, it is trading 35.2% below its 52-week high of $309.78 from December 2024. Investors who bought $1,000 worth of Manhattan Associates’s shares 5 years ago would now be looking at an investment worth $1,940.
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