Manhattan Associates (MANH) Premium P/E Faces Slower 0.7% EPS Growth Narrative Challenge

Manhattan Associates (MANH) has wrapped up FY 2025 with fourth quarter revenue of US$270.4 million and basic EPS of US$0.87, alongside net income excluding extra items of US$52.0 million. Trailing 12 month revenue came in at about US$1.1 billion with basic EPS of US$3.64. Over recent quarters, the company has seen revenue range from US$262.8 million to US$275.8 million and quarterly basic EPS move between US$0.86 and US$0.97, set against trailing 12 month EPS that has stayed around the mid US$3.50s. With a trailing 12 month net profit margin of 20.3%, slightly below last year’s 20.9%, the latest print keeps the focus firmly on how consistently the business is converting revenue into profit.

See our full analysis for Manhattan Associates.

With the headline numbers on the table, the next step is to see how this earnings run rate lines up with the key narratives around Manhattan Associates’ growth, quality and risk profile.

Curious how numbers become stories that shape markets? Explore Community Narratives

Five year EPS growth vs 0.7% recent pace

• Across the last five years, earnings grew at about 20% per year, while trailing 12 month earnings growth over the last year was 0.7%, showing a much slower recent pace than the longer term.
• What stands out for bullish investors is that the slower 0.7% trailing earnings growth sits alongside forecasts of about 13.2% annual earnings growth, which they argue still supports a growth story, while others may point to the gap versus the past 20% per year track record as a reason to question how much of that growth is already reflected in expectations.
  • Supporters can point to trailing 12 month EPS of US$3.64 and trailing 12 month net income excluding extra items of US$219.9 million as evidence the business remains solidly profitable.
  • Skeptics may focus on the contrast between that 13.2% earnings growth forecast and the slower recent 0.7% outcome, and ask whether the shift from the prior multi year 20% per year trend justifies being cautious about how much growth investors should bake in.

To see how this slower recent growth stacks up against the longer term story, and what others think that means for the stock, have a look at the full narrative that investors are debating right now. 📊 Read the full Manhattan Associates Consensus Narrative.

Premium 43.8x P/E and DCF gap

• The shares traded at a P/E of 43.8x, above both the peer average of 40.6x and the US Software industry average of 30.4x, while a DCF fair value of US$135.34 sits below the current share price of US$161.14.
• Critics highlight that paying 43.8x earnings for a company where DCF fair value is US$135.34 versus a US$161.14 market price, and where revenue is expected to grow about 7.8% per year and earnings about 13.2% per year, challenges a bearish view that all growth optimism is unjustified, but also gives them concrete numbers to argue the shares carry a premium that depends on those forecasts playing out.
  • The premium P/E versus peers and the industry suggests investors are currently willing to pay more for each dollar of trailing earnings than for many other software names, even though forecasts in the data have earnings and revenue growing more slowly than the referenced broader US market.
  • The gap between the US$161.14 share price and the US$135.34 DCF fair value provides a reference point for those who see downside risk if growth or margins fall short of the paths implied in the models that investors are using.

20.3% net margin holding near last year

• On the trailing 12 months, net profit margin was 20.3%, slightly below the prior 20.9% level, while trailing 12 month revenue was about US$1.1b and net income excluding extra items was US$219.9 million.
• What is interesting for bullish investors is that a 20.3% net margin, combined with trailing 12 month revenue of roughly US$1.1b and EPS around the mid US$3.50s, supports the view that Manhattan Associates is converting a significant slice of its revenue into profit, although the small move down from 20.9% means they need to watch whether this ratio stays stable if revenue growth tracks the forecast 7.8% per year.
  • Supporters can point to quarterly net income excluding extra items between US$51.9 million and US$58.6 million over FY 2025 as another sign that profitability has been consistent across recent quarters.
  • At the same time, the modest dip from a 20.9% to 20.3% net margin, together with the slower 0.7% trailing 12 month earnings growth, offers a reminder that even strong profit levels can move around as conditions change, so they are not a guarantee of future outcomes.

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on Manhattan Associates's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

Explore Alternatives

Manhattan Associates is working with a slower recent 0.7% earnings growth pace and a premium 43.8x P/E that sits above both peer and industry averages.

If that combination of softer recent growth and a premium valuation makes you cautious, check out these 881 undervalued stocks based on cash flows to focus on companies where price and fundamentals are more closely aligned today.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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