Manhattan Associates Inc (NASDAQ: MANH)

Sector: Technology Industry: Software - Application CIK: 0001056696
Market Cap 8.56 Bn
P/B 27.19
P/E 38.91
P/S 7.91
ROIC (Qtr) 58.35
Div Yield % 0.00
Rev 1y % (Qtr) 5.70
Total Debt (Qtr) 56.18 Mn
Debt/Equity (Qtr) 0.18
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About

Manhattan Associates Inc., often recognized by its stock symbol MANH, operates in the global commerce solutions industry. The company, established in 1990 in Manhattan Beach, California, and incorporated in Georgia in 1998, has grown into a trusted partner for various entities, including retailers, wholesalers, manufacturers, logistics providers, and other organizations. Manhattan Associates specializes in managing supply chains, inventory, and omnichannel operations for businesses. Their software solutions cater to complex supply chain operations...

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Investment thesis

Bull case

  • Strong operating cash flow of 389.47M provides robust 6.93x coverage of total debt 56.18M, indicating excellent debt servicing capability and financial flexibility.
  • Strong tangible asset base of 777.14M provides 13.83x coverage of total debt 56.18M, indicating robust asset backing and low credit risk.
  • Robust free cash flow of 374.01M exceeds capital expenditure of 15.46M by 24.20x, indicating strong organic growth funding capability.
  • Strong operating cash flow of 389.47M provides 2.23x coverage of SG&A expenses 174.94M, showing efficient operational cost management.
  • Robust tangible asset base of 777.14M provides 6.10x coverage of working capital 127.42M, indicating strong operational backing.

Bear case

  • Operating cash flow of 389.47M barely covers its investment activities of (15.46M), with a coverage ratio of -25.20, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (15.46M) provide weak support for R&D spending of 145.06M, which is -0.11x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of 389.47M provides insufficient coverage of deferred revenue obligations of 337.05M, which is 1.16x, raising concerns about future service delivery capabilities.
  • The company's operating cash flow of 389.47M shows concerning coverage of stock compensation expenses of 111.26M, with a 3.50 ratio indicating potential earnings quality issues.
  • Retained earnings of 345.10M provide limited buffer against comprehensive income items of (30.93M), which is -11.16x, indicating elevated exposure to market risks.

Product Or Service Breakdown of Revenue (2020)

Peer comparison

Companies in the Software - Application
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SAP Sap Se 235.43 Bn 27.31 5.44 9.50 Bn
2 SHOP Shopify Inc. 147.12 Bn 119.52 12.73 0.19 Bn
3 UBER Uber Technologies, Inc 147.10 Bn 14.63 2.83 12.08 Bn
4 CRM Salesforce, Inc. 122.20 Bn 594.48 15.45 11.14 Bn
5 INTU Intuit Inc. 113.93 Bn 178.01 32.63 6.78 Bn
6 ADBE Adobe Inc. 111.00 Bn 15.57 4.67 6.65 Bn
7 NOW ServiceNow, Inc. 109.54 Bn 62.67 8.25 2.40 Bn
8 ADP Automatic Data Processing Inc 86.44 Bn 20.41 4.07 4.37 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 9.94 2.08
EV to Cash from Ops. EV/CFO 21.42 11.38
EV to Debt EV to Debt 148.49 47.67
EV to EBIT EV/EBIT 29.18 6.78
EV to EBITDA EV/EBITDA 29.16 7.15
EV to Free Cash Flow [EV/FCF] EV/FCF 22.30 14.44
EV to Market Cap EV to Market Cap 0.97 -8.88
EV to Revenue EV/Rev 7.71 4.04
Price to Book Value [P/B] P/B 27.19 3.65
Price to Earnings [P/E] P/E 38.91 -117.75
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -4.05
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 4.38
Dividend per Basic Share Div per Share (Qtr) 0.00 0.15
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 2.48
Interest Coverage Interest Coverage 0.00 -43.57
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -78.18 -222.46
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 23.48 281.53
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.78
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 0.73 -327.55
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 6.80 30.09
EBIT Growth (1y) % EBIT 1y % (Qtr) 7.15 -213.00
EBT Growth (1y) % EBT 1y % (Qtr) 7.15 -86.84
EPS Growth (1y) % EPS 1y % (Qtr) 2.25 108.58
FCF Growth (1y) % FCF 1y % (Qtr) 30.62 6.29
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 6.59 94.58
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.29 0.58
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.02
Cash Ratio Cash Ratio (Qtr) 0.72 3.78
Current Ratio Curr Ratio (Qtr) 1.28 8.27
Debt to Equity Ratio Debt/Equity (Qtr) 0.18 0.14
Interest Cover Ratio Interest Cover Ratio 0.00 -43.57
Times Interest Earned Times Interest Earned 0.00 -43.57
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 27.00 -105.03
EBIT Margin % EBIT Margin % (Qtr) 26.44 -130.16
EBT Margin % EBT Margin % (Qtr) 26.44 -121.17
Gross Margin % Gross Margin % (Qtr) 56.30 58.37
Net Profit Margin % Net Margin % (Qtr) 20.30 -126.13