Manhatten Associates, Inc. (MANH: 30.78 +0.18 +0.59%) recently jumped higher to within striking distance of the multi-year high at $31.64 after reporting a solid Q3 earnings surprise of 17%. With estimates on the rise and a strong industry rank, this Zacks #1 rank stock is flying high with momentum.
Third-Quarter Results
Revenue for the period was up 14% to $74 million. Earnings also came in strong at 28 cents, 17% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 44%.
The gains were led by the company's services division, where revenue was up 14% from last year to $53.5 million. Software license revenue was up a solid 6.4% to $12 million. Manhattan also noted that it closed two $1 million deals during the quarter, giving the top line a nice boost.
Nice Balance Sheet
The company also emerged from the quarter with its strong balance sheet in tact, with cash and equivalents of $105 million and no debt.
Estimates
We saw some decent revisions in estimates on the good quarter, with the current year up 10 cents to $1.25 and the next year up 11 cents to $1.40, a solid 12% growth projection.
Valuation
ALthough Manhattan's forward P/E of 25X looks pricey on first glance, its actually a discount to its peer average of 30X.
2-Year Chart
MANH has been trending higher for most of the last 18 months, recently spiking higher on the good quarter to move within striking distance of the multi-year high at $31.64. Take a look below.
Read the Sep 13 MANH article here
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Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the new Zacks Momentum Trader Service.
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