January 30, 2013
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Manhattan Associates (NASDAQ: MANH ) are up by about 9% today after gaining as much as 14% following a strong earnings report paired with good forward guidance.
So what: Manhattan Associates posted fourth-quarter revenue of $95.4 million, with $0.71 per share in adjusted earnings per share. Both those numbers came in ahead of forecasts -- analysts were looking for $92.2 million on the top line and $0.66 in EPS. Equally important (if not more so), Manhattan Associates also sees revenue of $410 million to $415 million for the 2013 fiscal year, with $3.15 to $3.21 in EPS. The Street was looking at $410.6 million on the top line and $3.10 per share in profit, so both are good news. On an adjusted basis, the company's projected EPS figure is about 14% higher than what it earned for the 2012 fiscal year.
Now what: Although this report is good news, I'd dig deeper before deciding that a 14% growth rate is worth investing in. After this pop, Manhattan Associates is trading at its highest P/E in three years, which is now 16% above the level it reached exactly three years ago and 50% higher than its level in the summer. Keep your eye on this stock, but don't take today's pop as a reason to add it to your portfolio.
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