Manhattan Associates Earnings: Blows Through Guidance Again

Wide-moat Manhattan Associates reported second-quarter results that were ahead of our expectations, on the back of balanced software demand strength. Management also raised its full-year revenue guidance for 2024 by $1 million more than the upside from the quarter, while also raising its full-year profitability target. The company continues to find success in migrating its customers to the cloud, which in turn also increases services revenue and ultimately results in operating leverage as its cloud business scales. We think Manhattan remains in the early stages of this process. Based on results and guidance, we have modestly increased our near-term estimates, and we are raising our fair value estimate to $240 per share from $225. We view the shares as fairly valued after the after-hours jump in the shares.