MANHATTAN ASSOCIATES INC (MANH) DCF Valuation & Fundamental Primer
MANHATTAN ASSOCIATES INC (MANH) currently trades at $211.77 with an enterprise value of $6.65B. Our proprietary institutional model rates MANHATTAN ASSOCIATES INC at 73/100 (Grade: B+ · Quality Software Operator). The current market price prices in an implied 5-year revenue CAGR of 62.8% vs. historical growth of 15.5% (Aggressive Growth Expectations Priced In).
Institutional fundamental teardown of Manhattan Associates (MANH) covering SEC 10-K/10-Q cash flow conversion, SBC dilution friction, and Reverse-DCF valuation hurdles.
MANHATTAN ASSOCIATES INC (MANH) 3-Scenario DCF Valuation Range
Institutional Software Quality Scorecard (73/100 · Grade B+)
Solid software model with clear operating leverage, partially offset by standard SBC or moderate burn.
Strong cash conversion; 100%+ of operating profit turns into free cash
Disciplined equity compensation well below software industry average
Sub-par gross margins; higher cost of delivery or hardware/services mix
Positive net cash cushion; self-funding operations with zero insolvency risk
Core Investment Strengths & Moats
- High cash conversion: 100%+ of operating income converted to free cash flow
- Net cash positive: $218.4M balance sheet buffer
Key Operational & Dilution Risks
- Lower software gross margins (54.2%), indicating higher hosting or service delivery drag
Reverse-DCF Solver: What Growth is Priced Into MANH?
The current share price demands 62.8% 5-year CAGR—a +47.3% acceleration over historical run-rate (15.5%). Any growth slowdown risks valuation multiple contraction.
MANHATTAN ASSOCIATES INC (MANH) 5-Year Fundamental Forecast
| Statement Line Item | TTM Audited Base | TTM | Y1 | Y2 | Y3 | Y4 | Y5 |
|---|---|---|---|---|---|---|---|
| Revenue | $1.04B | $1.04B | $1.20B | $1.39B | $1.60B | $1.85B | $2.14B |
| Gross Profit | $565.1M | $565.1M | $652.5M | $753.4M | $870.0M | $1.00B | $1.16B |
| Operating Income (EBIT) | $261.6M | $261.6M | $302.1M | $348.8M | $402.8M | $465.1M | $537.1M |
| Stock-Based Compensation (SBC) | $93.2M | $93.2M | $107.6M | $124.2M | $143.5M | $165.7M | $191.3M |
| Unlevered Free Cash Flow (FCF) | $286.3M | $286.3M | $330.6M | $381.8M | $440.8M | $509.0M | $587.8M |
| SBC-Adjusted True Cash Flow | $193.1M | $193.1M | $223.0M | $257.5M | $297.4M | $343.4M | $396.5M |
Software & Cloud Services Peer Comparables Matrix
| Company | Ticker | Market Cap | TTM Revenue | Gross Margin | FCF Margin | Rule of 40 | SBC % Rev | EV / Rev |
|---|---|---|---|---|---|---|---|---|
| MANHATTAN ASSOCIATES INC | MANH | $33.37B | $1.04B | 54.2% | 27.5% | 42.9% | 8.9% | 31.8× |
| ServiceNow, Inc. | NOW | $192.40B | $10.98B | 79.5% | 31.5% | 54.0% | 15.8% | 17.2× |
| Workday, Inc. | WDAY | $38.74B | $2.98B | 74.9% | 20.8% | 41.1% | 17.1% | 12.5× |
| Salesforce, Inc. | CRM | $307.82B | $37.90B | 76.8% | 32.4% | 43.4% | 8.4% | 8.0× |
| Datadog, Inc. | DDOG | $45.58B | $2.68B | 81.2% | 28.5% | 55.0% | 20.4% | 16.1× |
| Snowflake Inc. | SNOW | $54.93B | $3.62B | 74.0% | 26.0% | 54.0% | 34.5% | 14.7× |
| HubSpot, Inc. | HUBS | $38.18B | $4.76B | 83.4% | 16.9% | 38.8% | 10.9% | 7.4× |
| Peer Cohort Median Benchmark (N=6) | 78.2% | 27.3% | 48.7% | 16.4% | 13.6× | |||
EV / Revenue Multiple Compression Stress Test
| Multiple Scenario | EV / Revenue | Implied Enterprise Value | Implied Equity Value | Implied Share Price | Delta vs Current |
|---|---|---|---|---|---|
| Current Multiple | 31.8× | $33.16B | $33.37B | $211.77 | 0.0% |
| -20% Multiple Compression | 25.4× | $26.53B | $26.74B | $169.69 | -20.0% |
| -35% Multiple Compression | 20.7× | $21.55B | $21.77B | $138.14 | -35.0% |
| Software Baseline Floor (5.0× EV/Rev) | 5.0× | $5.21B | $5.43B | $34.46 | -84.3% |
Frequently Asked Questions: MANHATTAN ASSOCIATES INC (MANH) Valuation
What is MANHATTAN ASSOCIATES INC (MANH)'s intrinsic DCF valuation and implied share price?
Based on audited SEC 10-K/10-Q filings and a 5-year 3-statement discounted cash flow (DCF) model, MANHATTAN ASSOCIATES INC (MANH) has a Base Case implied value of $43.57 per share (with a Bear Case of $21.25 and a Bull Case of $72.72), compared to its current price of $211.77. The model discounts projected free cash flows at a 10.0% WACC and a 2.5% terminal growth rate.
What is MANHATTAN ASSOCIATES INC (MANH)'s Rule of 40 score and Free Cash Flow margin?
MANHATTAN ASSOCIATES INC achieves a Rule of 40 score of 42.9%, combining a 15.5% revenue growth run-rate with a 27.5% TTM free cash flow margin on $1.04B in trailing twelve-month revenue. In the Software & Cloud Services peer cohort, the median Rule of 40 benchmark is 48.7%.
What revenue growth rate is priced into MANH stock according to Reverse-DCF analysis?
At $211.77 per share (Enterprise Value of $33.16B), our Reverse-DCF solver indicates the market is pricing in a 5-year implied revenue CAGR of 62.8%, compared to MANHATTAN ASSOCIATES INC's historical CAGR of 15.5%. Overall market expectations are rated as "Aggressive Growth Expectations Priced In".
How does MANHATTAN ASSOCIATES INC compare to Software & Cloud Services software peers?
MANHATTAN ASSOCIATES INC (MANH) earns an institutional Software Quality Score of 73/100 (Grade B+ — Quality Software Operator). Across its Software & Cloud Services peer group (NOW, WDAY, CRM, DDOG, SNOW), the cohort trades at a median EV/TTM Revenue multiple of 13.6× and a median gross margin of 78.2%.
How does Stock-Based Compensation (SBC) impact MANHATTAN ASSOCIATES INC (MANH)'s valuation?
MANHATTAN ASSOCIATES INC recorded $93.2M in TTM stock-based compensation (8.9% of revenue). When treating SBC as a cash-equivalent compensation expense, MANHATTAN ASSOCIATES INC's SBC-adjusted free cash flow yield is 0.6%, scoring 21/25 on our Shareholder Dilution Friction pillar.