BUY BUY BUY BUY: Manhattan Associates Inc

July 16, 2017
NASDAQ: MANH
MANHATTAN ASSOCIATES INC

BUY HOLD SELL
BUY
RATING SINCE 07/13/2010
A+ A A- B+ B B- C+ C C- D+ D D- E+ E E- F TARGET PRICE $54.23
Annual Dividend Rate Annual Dividend Yield Beta Market Capitalization 52-Week Range Price as of 7/13/2017
NA NA 1.18 $3.3 Billion $44.83-$68.00 $46.95
Sector: Technology Sub-Industry: Application Software Source: S&P

Weekly Price: (US$) SMA (50) SMA (100) 1 Year 2 Years
MANH BUSINESS DESCRIPTION
Manhattan Associates, Inc. develops, sells, 80
deploys, services, and maintains software solutions
75
to manage supply chains, inventory, and
omni-channel operations for retailers, wholesalers, 70
manufacturers, logistics providers, and other
organizations. 65
STOCK PERFORMANCE (%) 60

3 Mo. 1 Yr. 3 Yr (Ann)
55
Price Change -4.62 -24.76 13.36 TARGET
TARGET PRICE
TARGETPRICE
TARGET $54.23
PRICE$54.23
PRICE $54.23
$54.23
50
GROWTH (%)
Last Qtr 12 Mo. 3 Yr CAGR 45
Revenues -4.26 4.44 11.50 Rating History
Net Income 2.70 15.98 19.82 BUY
EPS 5.26 19.04 23.13
Volume in Millions
10
RETURN ON EQUITY (%)
MANH Ind Avg S&P 500 5
Q1 2017 84.51 15.24 13.16
Q1 2016 61.58 10.95 11.83 0
2015 2016 2017
Q1 2015 48.37 12.56 13.71 COMPUSTAT for Price and Volume, TheStreet Ratings, Inc. for Rating History
P/E COMPARISON RECOMMENDATION

We rate MANHATTAN ASSOCIATES INC (MANH) a BUY. This is driven by some important positives, which we
believe should have a greater impact than any weaknesses, and should give investors a better performance
opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its
growth in earnings per share, largely solid financial position with reasonable debt levels by most measures,
notable return on equity, good cash flow from operations and expanding profit margins. We feel its strengths
outweigh the fact that the company has had lackluster performance in the stock itself.
HIGHLIGHTS
26.83 70.93 24.41 MANHATTAN ASSOCIATES INC has improved earnings per share by 5.3% in the most recent quarter
compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per
MANH Ind Avg S&P 500
share growth over the past two years. We feel that this trend should continue. During the past fiscal year,
MANHATTAN ASSOCIATES INC increased its bottom line by earning $1.73 versus $1.40 in the prior year. This
EPS ANALYSIS¹ ($) year, the market expects an improvement in earnings ($1.90 versus $1.73).
MANH has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a
relatively favorable sign. Along with the favorable debt-to-equity ratio, the company maintains an adequate
quick ratio of 1.43, which illustrates the ability to avoid short-term cash problems.
The company's current return on equity greatly increased when compared to its ROE from the same quarter
one year prior. This is a signal of significant strength within the corporation. Compared to other companies in
Q1 0.31
Q2 0.35
Q3 0.38
Q4 0.36
Q1 0.38
Q2 0.46
Q3 0.47
Q4 0.42
Q1 0.40
the Software industry and the overall market, MANHATTAN ASSOCIATES INC's return on equity significantly
exceeds that of both the industry average and the S&P 500.
2015 2016 2017
NA = not available NM = not meaningful
Net operating cash flow has significantly increased by 51.57% to $61.28 million when compared to the same
quarter last year. In addition, MANHATTAN ASSOCIATES INC has also vastly surpassed the industry average
1 Compustat fiscal year convention is used for all fundamental
data items. cash flow growth rate of -1.38%.
The gross profit margin for MANHATTAN ASSOCIATES INC is rather high; currently it is at 57.06%. It has
increased from the same quarter the previous year. Regardless of the strong results of the gross profit
margin, the net profit margin of 19.66% trails the industry average.
This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy Report Date: July 16, 2017 PAGE 1
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2016. All rights reserved.
July 16, 2017
NASDAQ: MANH

Sector: Technology Application Software Source: S&P
NA NA 1.18 $3.3 Billion $44.83-$68.00 $46.95
PEER GROUP ANALYSIS INDUSTRY ANALYSIS

REVENUE GROWTH AND EBITDA MARGIN*
The US software industry is characterized by growth, innovation and technological advancements. The
business remains knowledge intensive and market structure is influenced by ownership of intellectual
160%
TEAM
property. Technology and product innovation shape business models in a rapidly changing environment. The
FA
industry can be divided into three main categories: systems software, programming software, and application
VO
software.
RA
BL
E
The industry landscape has seen radical change in recent years due to the growth of mass markets for
packaged software. Software development has witnessed rapid evolution over the past few decades with
projects increasing in size and complexity as the available computer hardware has dramatically improved in
both processing speed and storage size.
Revenue Growth (TTM)
ZEN HUBS The number of patents being issued across the industry has recently surged. Ownership of intellectual
ELLI PAYC
property is a key driver of growth and the patent system plays a vital role in the development of the industry.
UN
RP
FA
However, piracy remains a pressing issue as copyright infringement and illegal reproduction and transfer of
VO
BLKB
-20%
FICO MANH licensed software is widespread.

RA
AZPN
B
ACIW
LE
-20% 50% The software industry is not immune to the global economy. The return to positive slow growth will positively
EBITDA Margin (TTM) impact all industries and enhance new investments, which could bolster demand for services and add to
Companies with higher EBITDA margins and sales growth in the upcoming quarters. The need to lower costs has triggered global capabilities to evolve in
revenue growth rates are outperforming companies China and India. India, for instance, has emerged as the number two software talent pool worldwide,
with lower EBITDA margins and revenue growth capturing more than a quarter of the global outsourcing market. The industry is currently positioned favorably
rates. Companies for this scatter plot have a market going forward.
capitalization between $2.6 Billion and $4.4 Billion.
Companies with NA or NM values do not appear. PEER GROUP: Software
*EBITDA – Earnings Before Interest, Taxes, Depreciation and Recent Market Price/ Net Sales Net Income
Amortization.
Ticker Company Name Price ($) Cap ($M) Earnings TTM ($M) TTM ($M)
REVENUE GROWTH AND EARNINGS YIELD MANH MANHATTAN ASSOCIATES IN 46.95 3,260 26.83 598.19 124.98
FICO FAIR ISAAC CORP 141.54 4,383 35.21 922.58 130.08
160%
TEAM
BLKB BLACKBAUD INC 88.66 4,259 90.47 745.18 46.79
FA
AZPN ASPEN TECHNOLOGY INC 56.01 4,173 31.12 472.94 141.17

VO
RA
PAYC PAYCOM SOFTWARE INC 68.48 3,964 79.63 358.52 50.87

BL
ELLI ELLIE MAE INC 109.97 3,747 82.68 379.66 44.87

E
TEAM ATLASSIAN CORP PLC 35.53 3,154 NM 573.19 -26.50

RP REALPAGE INC 37.00 3,059 137.04 592.66 21.85
ACIW ACI WORLDWIDE INC 24.01 2,834 72.76 1,011.10 38.78
Revenue Growth (TTM)
ZEN ZENDESK INC 27.79 2,750 NM 336.55 -103.62

ZEN HUBS
ELLI PAYC HUBS HUBSPOT INC 71.30 2,606 NM 294.26 -43.48
UN
RP The peer group comparison is based on Major Application Software companies of comparable size.
FA
VO
BLKB
-20%
FICO
RA
MANH
B
ACIW
LE
-4%
AZPN4%
Earnings Yield (TTM)
Companies that exhibit both a high earnings yield
and high revenue growth are generally more
attractive than companies with low revenue growth
and low earnings yield. Companies for this scatter
plot have revenue growth rates between -2.7% and
151.8%. Companies with NA or NM values do not
appear.
July 16, 2017
NASDAQ: MANH

NA NA 1.18 $3.3 Billion $44.83-$68.00 $46.95
COMPANY DESCRIPTION STOCK-AT-A-GLANCE

Manhattan Associates, Inc. develops, sells, deploys, Below is a summary of the major fundamental and technical factors we consider when determining our
services, and maintains software solutions to manage overall recommendation of MANH shares. It is provided in order to give you a deeper understanding of our
supply chains, inventory, and omni-channel operations rating methodology as well as to paint a more complete picture of a stock's strengths and weaknesses. It is
for retailers, wholesalers, manufacturers, logistics important to note, however, that these factors only tell part of the story. To gain an even more comprehensive
providers, and other organizations. The company understanding of our stance on the stock, these factors must be assessed in combination with the stock’s
operates in three segments: the Americas; Europe, valuation. Please refer to our Valuation section on page 5 for further information.
Middle East and Africa; and Asia Pacific. It provides
supply chain solutions, such as distribution management, FACTOR SCORE
transportation management, and visibility solutions;
omni-channel central and local solutions; and inventory Growth out of 5 stars 5.0
optimization and planning solutions. The company also Measures the growth of both the company's income statement and weak strong
offers Manhattan SCALE, a portfolio of logistics cash flow. On this factor, MANH has a growth score better than 90% of
execution solutions that offers trading partner the stocks we rate.
management, yard management, optimization,
warehouse management, and transportation execution
services. In addition, it provides professional services,
Total Return out of 5 stars 1.5
including solutions planning and implementation, and Measures the historical price movement of the stock. The stock weak strong
related consulting services; customer training and performance of this company has beaten 20% of the companies we
support services; and software enhancement services. cover.
Further, the company provides training and change
management services; and resells computer hardware, Efficiency out of 5 stars 5.0
radio frequency terminal networks, radio frequency Measures the strength and historic growth of a company's return on weak strong
identification chip readers, bar code printers and invested capital. The company has generated more income per dollar of
scanners, and other peripherals. It offers products capital than 90% of the companies we review.
through direct sales personnel, as well as through
partnership agreements with various organizations.
Manhattan Associates, Inc. was founded in 1990 and is
Price volatility out of 5 stars 2.5
headquartered in Atlanta, Georgia. Measures the volatility of the company's stock price historically. The weak strong
stock is less volatile than 40% of the stocks we monitor.
2300 Windy Ridge Parkway, Tenth Floor Solvency out of 5 stars 4.0
Atlanta, GA 30339 Measures the solvency of the company based on several ratios. The weak strong
USA company is more solvent than 70% of the companies we analyze.
Phone: 770-955-7070
Fax: 770-955-0302 Income out of 5 stars 0.5
http://www.manh.com
Measures dividend yield and payouts to shareholders. This company weak strong
pays no dividends.
THESTREET RATINGS RESEARCH METHODOLOGY
TheStreet Ratings' stock model projects a stock's total return potential over a 12-month period including both
price appreciation and dividends. Our Buy, Hold or Sell ratings designate how we expect these stocks to
perform against a general benchmark of the equities market and interest rates. While our model is
quantitative, it utilizes both subjective and objective elements. For instance, subjective elements include
expected equities market returns, future interest rates, implied industry outlook and forecasted company
earnings. Objective elements include volatility of past operating revenues, financial strength, and company
cash flows.
Our model gauges the relationship between risk and reward in several ways, including: the pricing drawdown
as compared to potential profit volatility, i.e.how much one is willing to risk in order to earn profits; the level of
acceptable volatility for highly performing stocks; the current valuation as compared to projected earnings
growth; and the financial strength of the underlying company as compared to its stock's valuation as
compared to projected earnings growth; and the financial strength of the underlying company as compared
to its stock's performance. These and many more derived observations are then combined, ranked, weighted,
and scenario-tested to create a more complete analysis. The result is a systematic and disciplined method of
selecting stocks.
July 16, 2017
NASDAQ: MANH

NA NA 1.18 $3.3 Billion $44.83-$68.00 $46.95
Consensus EPS Estimates² ($) FINANCIAL ANALYSIS

IBES consensus estimates are provided by Thomson Financial MANHATTAN ASSOCIATES INC's gross profit margin for the first quarter of its fiscal year 2017 is essentially
unchanged when compared to the same period a year ago. Even though sales decreased, the net income has
increased, representing an increase to the bottom line. MANHATTAN ASSOCIATES INC has average
liquidity. Currently, the Quick Ratio is 1.43 which shows that technically this company has the ability to cover
short-term cash needs. The company's liquidity has decreased from the same period last year.
During the same period, stockholders' equity ("net worth") has decreased by 15.48% from the same quarter
last year. Together, the key liquidity measurements indicate that it is relatively unlikely that the company will
0.48 1.90 E 2.06 E face financial difficulties in the near future.
Q2 FY17 2017(E) 2018(E)
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the
next 12-months. To learn more visit www.TheStreetRatings.com.
INCOME STATEMENT
Q1 FY17 Q1 FY16
Net Sales ($mil) 143.49 149.86
EBITDA ($mil) 43.98 45.31
EBIT ($mil) 41.72 43.10
Net Income ($mil) 28.22 27.48
BALANCE SHEET
Q1 FY17 Q1 FY16
Cash & Equiv. ($mil) 101.26 114.72
Total Assets ($mil) 287.34 303.17
Total Debt ($mil) 0.00 0.00
Equity ($mil) 147.87 174.97
PROFITABILITY
Q1 FY17 Q1 FY16
Gross Profit Margin 57.06% 56.75%
EBITDA Margin 30.65% 30.23%
Operating Margin 29.08% 28.76%
Sales Turnover 2.08 1.89
Return on Assets 43.49% 35.54%
Return on Equity 84.51% 61.58%
DEBT
Q1 FY17 Q1 FY16
Current Ratio 1.54 1.76
Debt/Capital 0.00 0.00
Interest Expense 0.00 0.00
Interest Coverage NA NA
SHARE DATA
Q1 FY17 Q1 FY16
Shares outstanding (mil) 69 72
Div / share 0.00 0.00
EPS 0.40 0.38
Book value / share 2.13 2.43
Institutional Own % NA NA
Avg Daily Volume 702,499 609,681
2 Sum of quarterly figures may not match annual estimates due to
use of median consensus estimates.
July 16, 2017
NASDAQ: MANH

NA NA 1.18 $3.3 Billion $44.83-$68.00 $46.95
RATINGS HISTORY VALUATION

Our rating for MANHATTAN ASSOCIATES INC has BUY. This stock's P/E ratio indicates a significant discount compared to an average of 70.93 for the Software
not changed since 10/21/2009. As of 7/13/2017, the industry and a premium compared to the S&P 500 average of 24.41. For additional comparison, its
stock was trading at a price of $46.95 which is price-to-book ratio of 22.05 indicates a significant premium versus the S&P 500 average of 3.04 and a
31.0% below its 52-week high of $68.00 and 4.7% significant premium versus the industry average of 9.06. The price-to-sales ratio is well above the S&P 500
above its 52-week low of $44.83. average, but well below the industry average. The valuation analysis reveals that, MANHATTAN
ASSOCIATES INC seems to be trading at a discount to investment alternatives within the industry.
2 Year Chart
$80
BUY: $61.48
Price/Earnings 1 2 3 4 5 Price/CashFlow 1 2 3 4 5
$70 premium discount premium discount
MANH 26.83 Peers 70.93 MANH 20.36 Peers 29.02
$60 • Discount. A lower P/E ratio than its peers can • Discount. The P/CF ratio, a stock’s price divided by
signify a less expensive stock or lower growth the company's cash flow from operations, is useful
$50 expectations. for comparing companies with different capital
• MANH is trading at a significant discount to its requirements or financing structures.
2015 2016 peers. • MANH is trading at a significant discount to its
peers.
MOST RECENT RATINGS CHANGES

Price/Projected Earnings 1 2 3 4 5 Price to Earnings/Growth 1 2 3 4 5
premium discount premium discount
Date Price Action From To MANH 22.79 Peers 41.99 MANH 2.57 Peers 0.80
7/13/15 $61.48 No Change Buy Buy • Discount. A lower price-to-projected earnings ratio • Premium. The PEG ratio is the stock’s P/E divided by
Price reflects the closing price as of the date listed, if available than its peers can signify a less expensive stock or the consensus estimate of long-term earnings
lower future growth expectations. growth. Faster growth can justify higher price
• MANH is trading at a significant discount to its multiples.
RATINGS DEFINITIONS &
peers. • MANH trades at a significant premium to its peers.
DISTRIBUTION OF THESTREET RATINGS
(as of 7/13/2017) Price/Book 1 2 3 4 5 Earnings Growth 1 2 3 4 5
premium discount lower higher
43.81% Buy - We believe that this stock has the MANH 22.05 Peers 9.06 MANH 19.04 Peers 77.69
opportunity to appreciate and produce a total return of • Premium. A higher price-to-book ratio makes a • Lower. Elevated earnings growth rates can lead to
more than 10% over the next 12 months. stock less attractive to investors seeking stocks capital appreciation and justify higher
with lower market values per dollar of equity on the price-to-earnings ratios.
30.69% Hold - We do not believe this stock offers balance sheet. • However, MANH is expected to significantly trail its
conclusive evidence to warrant the purchase or sale of • MANH is trading at a significant premium to its peers on the basis of its earnings growth rate.
shares at this time and that its likelihood of positive total peers.
return is roughly in balance with the risk of loss.
Price/Sales 1 2 3 4 5 Sales Growth 1 2 3 4 5
25.50% Sell - We believe that this stock is likely to premium discount lower higher
decline by more than 10% over the next 12 months, with MANH 5.45 Peers 6.84 MANH 4.44 Peers 8.67
the risk involved too great to compensate for any • Discount. In the absence of P/E and P/B multiples, • Lower. A sales growth rate that trails the industry
possible returns. the price-to-sales ratio can display the value implies that a company is losing market share.
investors are placing on each dollar of sales. • MANH significantly trails its peers on the basis of
• MANH is trading at a discount to its industry on this sales growth
TheStreet Ratings measurement.
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July 16, 2017

MANHATTAN ASSOCIATES INC

Sector: Technology Sub-Industry: Application Software Source: S&P

STOCK PERFORMANCE (%) 60

P/E COMPARISON RECOMMENDATION

MANHATTAN ASSOCIATES INC

PEER GROUP ANALYSIS INDUSTRY ANALYSIS

FICO MANH licensed software is widespread.

AZPN ASPEN TECHNOLOGY INC 56.01 4,173 31.12 472.94 141.17

PAYC PAYCOM SOFTWARE INC 68.48 3,964 79.63 358.52 50.87

ELLI ELLIE MAE INC 109.97 3,747 82.68 379.66 44.87

TEAM ATLASSIAN CORP PLC 35.53 3,154 NM 573.19 -26.50

ZEN ZENDESK INC 27.79 2,750 NM 336.55 -103.62

MANHATTAN ASSOCIATES INC

COMPANY DESCRIPTION STOCK-AT-A-GLANCE

THESTREET RATINGS RESEARCH METHODOLOGY

MANHATTAN ASSOCIATES INC

Consensus EPS Estimates² ($) FINANCIAL ANALYSIS

MANHATTAN ASSOCIATES INC

RATINGS HISTORY VALUATION

MOST RECENT RATINGS CHANGES

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