Value
4.8/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 3.4 |
| P/S | 5.5 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 5.9 |
| PEG | 4.9 |
| Analyst target | 7.5 |
- ▸Forward P/E: 22.0x
- ▸PEG: 1.60
MANH · Why this verdict
Why Manhattan Associates (MANH) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.2/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Manhattan Associates is a high-quality software franchise with a wide economic moat, excellent cash conversion, and a four-quarter earnings beat streak averaging 12% positive surprise — but a rich 24x forward multiple, a confirmed technical downtrend including a death cross, and soft growth combine to make the risk/reward only marginally above the threshold, warranting patience for a better technical setup.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
At a forward P/E of roughly 24x and a PEG ratio of 1.77, the valuation assumes above-average future growth, yet both revenue and earnings growth are currently soft — a mismatch the market will resolve either by the business growing into the multiple or by re-rating the stock lower. Bear case | EPS grows more than 15% year-over-year for 2 consecutive quarters, demonstrating the growth trajectory that justifies the current multiple. | →Stable |
| CounterSoftware businesses with wide moats and high renewal rates can sustain premium multiples for extended periods even at moderate growth, if they retain pricing power and strong customer retention. | ||
The business earns approximately 20% operating margins, converts free cash flow at 136% of net income, and possesses a wide economic moat — a combination of durable competitive advantage and strong cash generation that underpins the premium the market attaches to the stock. Quality breakdown | Operating margin holds above 18% and FCF-to-net-income conversion stays above 100% for 4 consecutive quarters, confirming the quality is structural. | →Stable |
| CounterEven a high-quality franchise with a wide moat can de-rate if growth decelerates below expectations, and the current forward multiple leaves limited cushion for any operational disappointment. | ||
The company has beaten consensus EPS estimates in all four of the last four quarters, with an average positive surprise of approximately 12%, suggesting a pattern of consistently under-promising and over-delivering. Catalyst breakdown | The beat streak extends to at least 6 consecutive quarters with average surprise remaining above 5%. | →Stable |
| CounterA forward multiple of roughly 24x partly prices in recurring beats — any quarter where results merely meet rather than beat expectations may trigger a disproportionate selloff. | ||
The stock is trading below its 200-day moving average with the average declining at -6.2% per 30 days, and a death cross has formed — a technical configuration that historically increases near-term downside risk and can extend selling pressure even for fundamentally strong businesses. Momentum breakdown | Price recovers above the 200-day moving average and sustains above it for at least 30 consecutive days, signaling a trend reversal. | →Stable |
| CounterVolume accumulation (rising OBV) suggests buyers are active beneath the price weakness, which can precede a technical recovery before the moving averages formally confirm it. | ||
At a forward P/E of roughly 24x and a PEG ratio of 1.77, the valuation assumes above-average future growth, yet both revenue and earnings growth are currently soft — a mismatch the market will resolve either by the business growing into the multiple or by re-rating the stock lower.
→StableBear case
- Expectation
- EPS grows more than 15% year-over-year for 2 consecutive quarters, demonstrating the growth trajectory that justifies the current multiple.
CounterSoftware businesses with wide moats and high renewal rates can sustain premium multiples for extended periods even at moderate growth, if they retain pricing power and strong customer retention.
The business earns approximately 20% operating margins, converts free cash flow at 136% of net income, and possesses a wide economic moat — a combination of durable competitive advantage and strong cash generation that underpins the premium the market attaches to the stock.
→StableQuality breakdown
- Expectation
- Operating margin holds above 18% and FCF-to-net-income conversion stays above 100% for 4 consecutive quarters, confirming the quality is structural.
CounterEven a high-quality franchise with a wide moat can de-rate if growth decelerates below expectations, and the current forward multiple leaves limited cushion for any operational disappointment.
The company has beaten consensus EPS estimates in all four of the last four quarters, with an average positive surprise of approximately 12%, suggesting a pattern of consistently under-promising and over-delivering.
→StableCatalyst breakdown
- Expectation
- The beat streak extends to at least 6 consecutive quarters with average surprise remaining above 5%.
CounterA forward multiple of roughly 24x partly prices in recurring beats — any quarter where results merely meet rather than beat expectations may trigger a disproportionate selloff.
The stock is trading below its 200-day moving average with the average declining at -6.2% per 30 days, and a death cross has formed — a technical configuration that historically increases near-term downside risk and can extend selling pressure even for fundamentally strong businesses.
→StableMomentum breakdown
- Expectation
- Price recovers above the 200-day moving average and sustains above it for at least 30 consecutive days, signaling a trend reversal.
CounterVolume accumulation (rising OBV) suggests buyers are active beneath the price weakness, which can precede a technical recovery before the moving averages formally confirm it.
Per-dimension breakdown
Quality
8.5/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 10.0 |
| Gross margin | 7.2 |
| Op margin | 9.2 |
| Net margin | 9.8 |
| Current ratio | 4.3 |
| FCF quality | 9.5 |
| Moat | 8.4 |
| Piotroski F | 7.8 |
- ▸Excellent ROE: 96%
- ▸Strong margins: 20%
- ▸Excellent cash conversion: 136% FCF/NI
- ▸Wide economic moat
Growth
2.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.3 |
| EPS growth | 1.3 |
Momentum
2.8/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.0 |
| MACD | 0.0 |
| OBV | 10.0 |
| MA position | 1.0 |
| Volume | 0.0 |
- ▸Capitulation risk (RSI 18, below 200MA)
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -6.5%/30d — confirmed downtrend
Sentiment
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.0 |
| Price target | 9.2 |
| erm sentiment | 4.5 |
- ▸Analyst upside: 42%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Insider selling (low materiality) — $1,163,295 (0.015% of mkt cap)
Peer rank
3.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.6 |
| quality rank | 8.5 |
| growth rank | 2.1 |
- ▸Superior ROE vs peers
Technical
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 8.4 |
| support resistance | 9.1 |
| 52w position | 0.5 |
Risk (lower is worse)
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 6.9 |
| days to cover | 6.0 |
| volatility | 0.8 |
| put call | 5.1 |
| implied vol | 3.0 |
| max pain risk | 7.0 |
| beta | 7.2 |
| debt equity | 8.9 |
- ▸High IV: 62%
- ▸Concentration risks: 2 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 8.6 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- ASYMMETRY:2.5>=1.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:26d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- MOMENTUM:2.8<4.5
- DEATH_CROSS:HARD_BLOCK
- 8K_SERIOUS:2.05
Warning (0)
none
Reward-to-Risk
2.49
Upside
+23.2%
Downside
9.3%
Sizing output
AVOID
SetupFALLING_KNIFE — Death cross, below all MAs, RSI 18, MACD bearish
EdgeTEMP_HEADWIND — High quality (8.5) with weak momentum (2.8)
SuitabilityMODERATE — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 5.2 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Quality at 8.5) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:2.8<4.5, DEATH_CROSS:HARD_BLOCK, 8K_SERIOUS:2.05) reinforce the read. Current asymmetry R:R is 2.49 — supplementary context, not the trigger for this path.
The strongest dimensions are Quality at 8.5, Catalyst at 7.2, and Sentiment at 7.1; the weakest are Momentum at 2.8, Growth at 2.8, and Peer rank at 3.3. The V9 engine flagged 3 failed gates, producing an asymmetric reward-to-risk of 2.49 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1The business earns approximately 20% operating margins, converts free cash flow at 136% of net income, and possesses a wide economic moat — a combination of durable competitive advantage and strong cash generation that underpins the premium the market attaches to the stock.
Trip ifOperating margin falls below 15% for 2 consecutive quarters, signaling quality deterioration.
- P2The company has beaten consensus EPS estimates in all four of the last four quarters, with an average positive surprise of approximately 12%, suggesting a pattern of consistently under-promising and over-delivering.
Trip ifEPS surprise falls below 0% for 2 consecutive quarters, breaking the beat streak.
- P3The stock is trading below its 200-day moving average with the average declining at -6.2% per 30 days, and a death cross has formed — a technical configuration that historically increases near-term downside risk and can extend selling pressure even for fundamentally strong businesses.
Trip ifPrice sustains above the 200-day moving average for more than 30 consecutive days.
- P4At a forward P/E of roughly 24x and a PEG ratio of 1.77, the valuation assumes above-average future growth, yet both revenue and earnings growth are currently soft — a mismatch the market will resolve either by the business growing into the multiple or by re-rating the stock lower.
Trip ifEPS grows more than 15% year-over-year for 2 consecutive quarters, validating the growth premium embedded in the multiple.