MANHATTAN ASSOCIATES, INC. (MANH): what the price assumes
In the published model solve dated 2026-Q2, anchored at $222.95, MANHATTAN ASSOCIATES, INC. (MANH) is priced for +48.7% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-06-27.
Generated: 2026-08-31 · Source: https://boothcheck.com/report/MANH
Headline
| Field | Value |
|---|---|
| Ticker | MANH |
| Company | MANHATTAN ASSOCIATES, INC. |
| Current price | $222.95/sh |
| Composition | Cloud subscriptions 38% / Software license 1% / Maintenance 12% / Services 47% / Hardware 2% |
What The Price Assumes (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin (value-band context) | 18.8% |
| Operating margin today | 24.3% |
| Margin compression (value-band) | -5.5pp |
| Implied growth | 48.7% |
| Multiple paid | 47x operating income |
The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.
Solve inputs: computed at a 10.6% cost of capital with 4% terminal growth over a 5-year stage.
How unusual the bet is: elevated (limited comparison data)
| Reference | Value |
|---|---|
| vs own history | +1.84σ |
| cohort percentile (of 188 peers) | 80 |
Valuation X-Ray
Every valuation family lands below the price. The price therefore sits beyond what those standard frames encode.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 5.72x | 5 | expensive |
| Earnings | 5.91x | 5 | expensive |
| Relative | 1.44x | 3 | expensive |
| Growth | 1.35x | 3 | expensive |
Families that call it expensive: Asset, Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.2%); the inversion above states its own rate.
Per-Model Detail (n=16)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $165.08 | 1.35x | yes | FCF base $0.4B, growth 6% (input: historical growth), terminal g 4.0%, WACC 9.2%, 6yr projection |
| DCF Exit Multiple | Growth | $233.82 | 0.95x | yes | Exit EV/EBITDA: 43.8x / 45.8x / 47.8x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | $159.01 | 1.40x | yes | P/E 43.05x (blended: static sector reference 35x + trailing (TTM) 62x), scenarios: 35.9x / 43.0x / 50.2x (bear / base = reference held flat / bull), EV/EBITDA 31.25x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $38.98 | 5.72x | yes | BV/sh $2.70, ROE (TTM) 133.5%, ke 9.3% |
| Two-Stage Excess Return | Asset | $456.88 | 0.49x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $138.61 | 1.61x | yes | Rev $1.1B, growth 6% (input: historical growth; tapered), Terminal P/S: 6.7x / 8.0x / 9.3x (bear / base = today's held flat / bull, cap 8x) |
| Growth-Adjusted P/E | Relative | — | — | no | — |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $37.51 | 5.94x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.22B × (1−25%) / WACC 9.2% → EPV (no growth) |
| Residual Income | Asset | $66.51 | 3.35x | yes | BV $2.70 + 5yr PV of (ROE (TTM) 133.5% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $14.56 | 15.31x | yes | √(22.5 × EPS $3.49 × BVPS $2.70) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $122.61 | 1.82x | yes | EBITDA $0.28B × sector EV/EBITDA 25.0x |
| FCF Yield | Earnings | $76.29 | 2.92x | yes | FCF $399.2M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $55.14 | 4.04x | yes | SBC-adj FCF $0.29B (FCF $0.40B − SBC $0.11B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $14.27 | 15.62x | yes | EPS $3.49 × (8.5 + 2×-1.8%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $27.01 | 8.25x | yes | BV $2.70 × (ROIC 196.3% / WACC 9.2%) |
| P/Sales Sector | Relative | $154.52 | 1.44x | yes | Revenue $1.13B × sector P/S 8.0x |
| PEG Fair Value | Relative | — | — | no | — |
| Earnings Yield | Earnings | $37.73 | 5.91x | yes | EPS $3.49 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net cash | $186.1m |
| Net debt / NOPAT (after-tax) | -0.91x (net cash) |
| Net debt / operating income (pre-tax) | -0.68x (net cash) |
| Share count CAGR (buyback) | -1.8% |
| Burning cash | no |
Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.
Bullet Takeaways
The momentum is in the recurring line. Cloud subscription revenue grew 24% in Q1 2026 to $117.1 million, and remaining performance obligations rose 24% to $2.35 billion, the contracted backlog that converts into future revenue.
The business is debt-free and high-margin, with a 25.6% operating margin, $226 million of net cash, and a share count shrinking about 1.5% a year. Profitability is funding the cloud transition without leverage.
The price assumes the growth keeps compounding. At $132.23 the embedded bet is roughly 31.6% operating-income growth, supported by peer multiples and a forward-DCF, with the asset and earnings-power frames both reading the stock as expensive.
Bull Case
The earnings trajectory is bending the right way, and the direction is more important than any single quarter. Manhattan Associates is mid-transition from selling perpetual software licenses to selling cloud subscriptions, and the recurring engine is now driving the business. In Q1 2026, cloud subscription revenue grew 24% to $117.1 million from $94.3 million a year earlier, total revenue rose 7% to $282 million, and adjusted EPS climbed 4% to $1.24. The shift is visible in the revenue mix, where cloud subscriptions now make up a large and growing share alongside the services book. The momentum, recurring revenue accelerating while the legacy license line runs off, is exactly the pattern that re-rates a software company over time.
The forward book confirms the trajectory is durable, not a one-quarter pop. Remaining performance obligations rose 24% to $2.35 billion, with 38% expected to convert to revenue within 24 months, which is contracted future revenue the company has already won. The 10-K describes the revenue-recognition mechanics behind this, noting that "timing of invoicing to customers may differ from timing of revenue recognition" and that the company has "an established history of collecting under the terms of our software license contracts without providing refunds or concessions" (FY2025 10-K, accession 0001193125-26-037138). A growing, high-quality backlog is the cleanest evidence that the cloud momentum continues. Management raised full-year 2026 guidance to revenue of $1.147 billion to $1.157 billion and lifted the cloud revenue midpoint to roughly $495 million, about 21% growth.
The balance sheet lets the company compound on its own terms. Manhattan is debt-free with about $226 million of net cash and a 25.6% operating margin, so it funds the cloud transition and returns capital without leverage, shrinking the share count roughly 1.5% a year. It is a category leader in supply-chain and warehouse-management software with high switching costs, and it is layering in new AI-enabled products on top of the platform. A profitable, debt-free software leader with accelerating recurring revenue, a 24% growing backlog, and raised guidance is the kind of trajectory that justifies a premium multiple as long as the growth holds.
Bear Case
The price is built on a specific, fragile assumption: that Manhattan keeps compounding at an exceptional rate for years. The embedded bet is roughly 31.6% operating-income growth, and the most fragile input baked into that price is the durability of cloud growth at current rates against an increasingly large base. Cloud revenue is growing 24%, but the company itself guides full-year cloud growth to about 21%, a deceleration, and the law of large numbers does not reverse. When a price requires a 31.6% growth assumption and the company's own guidance points to a lower, slowing rate, the gap between what is priced and what is promised is the bear's core argument.
The services line is the lumpy, narrative-dependent piece that can break a quarter. Professional services is roughly 47% of revenue, and it does not behave like recurring software: it depends on implementation activity, which swings with customer project timing and the macro. The company recently posted a 6% year-over-year decline in professional services before it recovered to 4% growth in Q1 2026, the kind of volatility that does not fit a 31.6%-growth valuation. The cloud transition itself creates this tension, because as customers move from on-premise to cloud, the high-margin maintenance and license lines run off and must be more than replaced by subscription growth. GAAP EPS actually fell 4% to $0.82 in Q1 2026 on higher taxes, a reminder that the headline adjusted numbers and the reported numbers can diverge.
The macro and competitive backdrop adds risk to a richly-priced name. The 10-K is candid that the company "remain[s] cautious regarding the pace of global economic growth" and points to "global geopolitical and economic volatility" as a concern (FY2025 10-K, accession 0001193125-26-037138). It also flags talent costs, noting it faces "significant competition for individuals with the skills required to perform the services we offer" and "may encounter increased compensation costs that are not offset by increased revenue" (FY2025 10-K, accession 0001193125-26-037138). At a price that assumes 31.6% growth, with the asset and earnings-power methods both calling the stock expensive, even a modest deceleration or a soft services quarter is enough to puncture the multiple. Morgan Stanley already cut its target to $165 at equal weight, a sign the Street's enthusiasm is not universal.
Valuation
This is a premium-priced growth software name, and the methods split accordingly. Against the $132.23 price (June 27, 2026), the relative-multiple and growth-DCF families support the price, while the asset-based and earnings-power families both read it as expensive. The blended X-ray figure across six methods lands near $134.30, essentially at the current price. The priced-in characterization is elevated: the market is paying a full multiple that peer comparisons and a forward-DCF can justify, but that the static, present-tense methods cannot.
The priced-in math sets a demanding bar. The embedded assumption is roughly 31.6% operating-income growth against a current operating margin of 25.6% and an implied terminal margin near 11.8%. The 31.6% growth figure is the crux: it is above the company's own guided cloud growth of about 21%, which means the price is leaning on the optimistic end of the recovery in the legacy lines plus continued cloud strength. The valuation does not rely on filing-sourced inputs for the growth rate; that is an engine output. What the filings confirm is the recurring-revenue quality behind the multiple, with the revenue-recognition and backlog mechanics documented in the 10-K (FY2025 10-K, accession 0001193125-26-037138).
The balance sheet removes financial risk from the equation. Manhattan is debt-free with about $226 million of net cash, so net-debt ratios are negative and there is no solvency question, only a growth-durability question. The honest read is that the valuation is fair-to-full: the methods that price the forward story support the price, the methods that price today's assets and earnings do not, and the gap is the growth premium. An investor here is underwriting that a 24%-growing cloud backlog and a category-leading platform sustain a high growth rate long enough to grow into the multiple, with little margin for a services air pocket or a faster-than-expected deceleration.
Catalysts
Q1 2026 results (reported April 2026) reinforced the cloud trajectory and prompted a guidance raise. Total revenue rose 7% to $282 million, cloud subscription revenue grew 24% to $117.1 million, services revenue rose 4% to $125.7 million, and remaining performance obligations climbed 24% to $2.35 billion. Adjusted EPS was $1.24, up 4%, while GAAP EPS fell 4% to $0.82 on higher taxes. Management raised full-year 2026 guidance to revenue of $1.147 billion to $1.157 billion, adjusted EPS of $5.29 to $5.37, and lifted the cloud revenue midpoint to about $495 million, roughly 21% growth. Each quarter's cloud growth rate and RPO trend is the central catalyst.
The services line and new AI products are the swing factors. Professional services, nearly half of revenue, has been volatile, swinging from a 6% decline to 4% growth, and its trajectory through 2026 will determine whether total revenue meets the raised guidance. On the product side, Manhattan is launching new AI-enabled capabilities on its supply-chain platform, and adoption of those features is a potential upside catalyst to both cloud growth and switching-cost depth.
Analyst sentiment is constructive but split, which sets up catalyst sensitivity at this valuation. Across roughly 10 analysts the consensus is Buy with an average price target near $201.90, well above the current price, yet Morgan Stanley cut its target to $165 at equal weight and Zacks moved to Hold, reflecting concern about services utilization and the rich multiple. The catalysts that would re-rate the stock are sustained cloud growth above guidance, a stable-to-growing services line, and continued RPO expansion; the risk is a single soft services quarter or a sharper cloud deceleration against a price that already assumes high growth.
Peer Cohorts (Per Segment, With Filing Citations)
Core business (reported)
- SPSC (SPS COMMERCE, INC.)
- FY2025 10-K: …consolidate or will be acquired. In addition, some of our competitors may enter into new alliances with each other or may establish or strengthen cooperative relationships with systems integrators, third-party consulting firms or other parties. New entrants not currently considered to be competitors may also enter…
- FY2025 10-K: …requires us to make difficult, subjective, or complex judgments relating to uncertain matters that could have a material effect on our financial condition and results of operations. Accordingly, we believe that our policies for revenue recognition, internally developed software, and business combinations are the most…
- TDC (TERADATA CORP /DE/)
- FY2025 10-K: …scale. • Deal Mix - Refers to the type of transactions closed within the period that generate the total perpetual software license, hardware and other revenue. For example, a higher mix of Teradata versus third-party products can positively impact profitability. 34 Table of Contents Gross profit for the following…
- FY2025 10-K: …Licenses, Hardware and Other line items and the Consulting Services segment represents the Consulting Services. For purposes of discussing results by segment, management excludes the impact of certain items, consistent with the manner by which management evaluates the performance of each segment. This format is…
- PCTY (PAYLOCITY HOLDING CORPORATION)
- FY2025 10-K: …promotion and sale of their products and services. Furthermore, our current or potential competitors may be acquired by third parties with greater available resources and the ability to initiate or withstand substantial price competition, which may include price concessions, delayed payment terms, or other terms and…
- FY2025 10-K: …we compete in our market include the following: • Solutions built to connect with today's modern workforce; • Comprehensive product suite on a single platform; • Breadth and depth of product functionality; • Configurability and ease of use of our solutions; • Modern, mobile, intuitive and consumer-oriented user…
- PAYC (Paycom Software, Inc.)
- FY2025 10-K: …condition. The market in which we participate is highly competitive, and if we do not compete effectively, our business, operating results or financial condition could be adversely affected. The market for HCM software is highly competitive, rapidly evolving and fragmented. If we are unable to compete effectively,…
- FY2025 10-K: …to execute our growth strategy, we must also attract and retain qualified sales, marketing and operational personnel capable of supporting a larger and more diverse client base. The technology industry is characterized by a high level of employee mobility and aggressive recruiting among competitors, and competition…
- TYL (TYLER TECHNOLOGIES, INC.)
- FY2025 10-K: …Also contributing to the increase in overall gross margin in 2025 is the redeployment of resources to research and development due to continued migration of clients to our SaaS products and consolidation of versions of on-premises software products with support obligations. The increase is partially offset by…
- FY2025 10-K: …details on our revenue mix shift. We expect that software license revenues will continue to decline as we shift our model away from perpetual software license to SaaS. Cost of revenues and overall gross margins The following table sets forth a comparison of the key components of our cost of revenues for the listed…
- BLKB (Blackbaud, Inc.)
- FY2025 10-K: …offerings and nationwide community networks within verticals where we compete, offering solutions with market leading robustness and reporting as well as the scale, reach, and reputation of our organization. • General business software vendors , such as Microsoft, Oracle and Salesforce.com, compete with us in certain…
- FY2025 10-K: …The market for software and related services targeting philanthropic-focused for-profit, nonprofit organizations and schools is competitive and highly fragmented. For certain areas of the market, entry barriers are low, as general tools for small businesses can usually be configured to manage the most basic…
- QLYS (QUALYS, INC.)
- FY2025 10-K: As we continue to extend our cloud platform's functionality by further developing IT, security and compliance solutions, such as Cybersecurity Asset Management, Patch Management, and Enterprise TruRisk Management, we expect to face additional competition in these new markets. Our competitors may also attempt to…
- FY2025 10-K: …competitors have substantially broader product offerings and can bundle competing products and services with other software offerings. As a result, customers may choose a bundled product offering from our competitors, even if individual products have more limited functionality than our solutions. These competitors…
- VERX (Vertex, Inc.)
- FY2025 10-K: …our competitors who currently focus their tax compliance services on small- to medium-sized businesses may be better positioned to increase their market share with small- to medium-sized businesses and may choose to enter our markets, whether competing based on price, service or otherwise. We also face a growing…
- FY2025 10-K: Research and development 11.2 % 10.0 % Selling and marketing 26.3 % 25.6 % General and administrative 23.9 % 22.9 % Depreciation and amortization 3.3 % 3.1 % Change in fair value of acquisition contingent earn-outs (2.3) % 2.6 % Other operating expense (income), net 1.7 % - % Total…
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.