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Today we're going to take a look at the well-established Manhattan Associates, Inc. (NASDAQ:MANH). The company's stock saw a significant share price rise of 22% in the past couple of months on the NASDAQGS. The company is inching closer to its yearly highs following the recent share price climb. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Let’s take a look at Manhattan Associates’s outlook and value based on the most recent financial data to see if the opportunity still exists.
Check out our latest analysis for Manhattan Associates
Is Manhattan Associates Still Cheap?
According to our valuation model, Manhattan Associates seems to be fairly priced at around 14.69% above our intrinsic value, which means if you buy Manhattan Associates today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is $212.57, there’s only an insignificant downside when the price falls to its real value. So, is there another chance to buy low in the future? Given that Manhattan Associates’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.
Can we expect growth from Manhattan Associates?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Manhattan Associates' earnings over the next few years are expected to increase by 38%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What This Means For You
Are you a shareholder? It seems like the market has already priced in MANH’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping an eye on MANH, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.