What Happened?
Shares of supply chain optimization software maker Manhattan Associates (NASDAQ: MANH) jumped 8% in the afternoon session after the company reported second-quarter results that beat analyst expectations and raised its full-year guidance.
The company announced adjusted earnings per share of $1.31 on revenue of $272.4 million for the quarter. These figures surpassed Wall Street's consensus estimates, which had predicted earnings of $1.13 per share on $263.6 million in revenue.
A key driver of the strong performance was a 22% year-over-year increase in cloud subscription revenue. The company also reported that its remaining performance obligations (RPO), a metric indicating future revenue under contract, grew by 26% and surpassed the $2 billion mark. Following the strong quarter, Manhattan Associates lifted its financial forecast for the full year. It now expected adjusted earnings per share to be between $4.76 and $4.84, up from a previous forecast. The company also raised its full-year revenue guidance to a range of $1.071 billion to $1.075 billion. This positive "beat and raise" report signaled strong demand for its supply chain solutions, even in a challenging economic environment.
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What Is The Market Telling Us
Manhattan Associates’s shares are somewhat volatile and have had 12 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 biggest move we wrote about over the last year was 6 months ago when the stock dropped 25.6% on the news that the company reported weak fourth-quarter results: Its revenue guidance for next year suggests a significant slowdown in demand, and its full-year revenue guidance fell short of Wall Street's estimates. Moving down the income statement, full-year EPS guidance also came in below expectations.
On the other hand, MANH beat EPS expectations on revenue, which came in slightly ahead of Wall Street's estimates. Still, this was a weaker quarter, with the outlook weighing on shares.
Manhattan Associates is down 20.2% since the beginning of the year, and at $214.44 per share, it is trading 30.8% 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 $2,242.
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