MANH 227.95 (-4.68%)
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Last update on 2024-06-07

Manhattan Associates (MANH) - Piotroski F-Score Analysis for Year 2023 (Final Score: 7/9)

In-depth Piotroski F-Score analysis of Manhattan Associates (MANH) for 2023. Final score: 7/9. Detailed financial health assessment reflecting profitability, liquidity, and operational efficiency.

Knowledge hint:
The Piotroski F-Score is a number between 0 to 9 which reflects the strength of a company's financial position. It is based on 9 criteria involving profitability, liquidity, and leverage. This model helps investors identify stocks that are strong, undervalued investments.
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Short Analysis - Piotroski Score: 7

We're running Manhattan Associates (MANH) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

Criteria
Company has a positive net income?
1
Company has a positive cash flow?
1
Return on Assets (ROA) are growing?
1
Operating Cashflow are higher than Netincome?
1
Leverage is declining?
0
Current Ratio is growing?
0
Number of shares not diluted?
1
Cross Margin is growing?
1
Asset Turnover Ratio is growing?
1

The Piotroski F-Score is a number between 0 and 9 assessing the financial strength of a company based on 9 criteria related to profitability, liquidity, and operating efficiency. Manhattan Associates (MANH) achieved a Piotroski Score of 7, indicating strong financial health. The company demonstrated positive net income, increasing operating cash flow, and a rising return on assets. Additionally, MANH’s operating cash flow is higher than its net income, suggesting strong earnings quality. Despite slight increases in leverage and a slight decline in the current ratio, the company has decreased the number of outstanding shares and shown improvements in gross margin and asset turnover.

Insights for Value Investors Seeking Stable Income

Based on the Piotroski score of 7, Manhattan Associates (MANH) appears to be a promising investment opportunity. The company's strong profitability, efficient management, and consistent growth over two decades make it worth considering for further investigation. However, investors should be cautious about the increasing leverage and slightly declining current ratio. Overall, MANH's financials suggest stability and potential for continued growth.

For those who are interested in delving deeper into the specifics, the subsequent section provides a comprehensive exploration of the criteria.

Profitability of Manhattan Associates (MANH)

Company has a positive net income?

Net income is the total profit of a company after all expenses and taxes have been deducted from revenue. A positive net income indicates that the company is profitable.

Historical Net Income of Manhattan Associates (MANH)

The net income of Manhattan Associates (MANH) for the year 2023 stands at $176,568,000, which is positive. Thus, the company gains one point in this criterion. This positive trend suggests financial health and profitability. Notably, MANH has demonstrated a consistent upward trend in net income over the past two decades. For instance, in 2003, the net income was merely $21.8 million, and it has grown substantially since then, showcasing robust financial growth and efficient management. The firm's profitability, as evidenced by these numbers, is an encouraging indicator for investors, suggesting sustainable growth and operational success.

Company has a positive cash flow?

The Cash Flow from Operations (CFO) assesses a company’s ability to generate sufficient positive cash flow from its core business operations, which is crucial for growth and sustainability.

Historical Operating Cash Flow of Manhattan Associates (MANH)

For Manhattan Associates (MANH), the CFO in 2023 amounts to $246.2 million, which is positive. This signifies robust operational health and efficiency in generating cash. Historically, MANH has shown consistent growth in CFO over the last 20 years, improving from $36.3 million in 2003 to $246.2 million in 2023. This positive trend highlights the company's strengthening operational efficacy and its ability to reinvest in its business for further growth, thus earning a favorable one point for this criterion.

Return on Assets (ROA) are growing?

Return on Assets (ROA) measures a company's profitability relative to its total assets. It is a crucial metric as it indicates how efficiently a company is using its assets to generate profit.

Historical change in Return on Assets (ROA) of Manhattan Associates (MANH)

In 2023, Manhattan Associates (MANH) reported an ROA of 0.284, up from 0.2324 in 2022. This increase reflects an improvement in the company’s profitability and its effectiveness in utilizing its assets, adding 1 point for this criterion. Over the past two decades, however, the industry median ROA has consistently been higher, with values such as 0.6741 in 2023. Nonetheless, the rising trend in Manhattan's ROA points to a positive development in its financial health.

Operating Cashflow are higher than Netincome?

Operating Cash Flow higher than Net Income is a key measure of earnings quality. It indicates that the company's operational activities, rather than accounting manipulations or other non-cash items, generate its earnings. This suggests good financial health.

Historical accruals of Manhattan Associates (MANH)

In 2023, Manhattan Associates (MANH) reported an Operating Cash Flow of $246.2 million compared to a Net Income of $176.6 million. The Operating Cash Flow being higher than Net Income suggests a strong earnings quality with robust underlying operations. This earns MANH 1 point in the Piotroski score, reflecting positively on its capability to generate cash from its core activities. Additionally, when examining data over the last 20 years, there has been a relatively consistent trend of maintaining higher or comparable Operating Cash Flows to Net Income, reinforcing the sustainability of MANH's financial health.

Liquidity of Manhattan Associates (MANH)

Leverage is declining?

Change in Leverage criterion judges a company based on its change in leverage ratio year-over-year; a decrease signals improved financial health.

Historical leverage of Manhattan Associates (MANH)

In this context, Manhattan Associates (MANH) saw its leverage ratio increase from 0.0247 in 2022 to 0.0263 in 2023, indicating a worsening leverage position. Although the ratio remains relatively low, the upward trend - contrary to expectations set by the Piotroski F-Score for a healthier business - results in 0 points for this criterion.

Current Ratio is growing?

Current Ratio essentially measures a company's ability to cover its short-term liabilities with its short-term assets. A higher ratio is usually favorable.

Historical Current Ratio of Manhattan Associates (MANH)

The Current Ratio for Manhattan Associates (MANH) has slightly decreased from 1.3162 in 2022 to 1.3096 in 2023. This demonstrates a marginal decline, indicating that the company's short-term liquidity position has weakened slightly. Over a longer period, their Current Ratio exhibited a decline from 5.5128 in 2003 to below the industry median in recent years.

Number of shares not diluted?

Examining the change in shares outstanding is important, as it indicates how much dilution shareholders might be facing. This can impact earnings per share (EPS).

Historical outstanding shares of Manhattan Associates (MANH)

The Outstanding Shares have decreased from 62,768,000 in 2022 to 61,817,000 in 2023. This results in a positive score under the Piotroski Analysis as it indicates a buyback or reduction in available shares. Looking at the long-term trend over 20 years, MANH has consistently reduced its outstanding shares from a peak of 123,528,000 in 2003. This continuous reduction can be seen as a shareholder-friendly move, enhancing the value of each share. A decrease translates into +1 point.

Operating of Manhattan Associates (MANH)

Cross Margin is growing?

Change in Gross Margin measures a company's efficiency in converting sales into gross profit. An increase is a positive sign.

Historical gross margin of Manhattan Associates (MANH)

The Gross Margin for Manhattan Associates (MANH) has increased from 0.533 in 2022 to 0.5363 in 2023, yielding 1 point according to the Piotroski Analysis criteria. This increase signals improved efficiency in converting sales into gross profit. The historical data shows a variable trend, with industry median often outperforming MANH. The recent gain is promising, but industry comparison suggests ongoing competition.

Asset Turnover Ratio is growing?

Asset Turnover is a measure of the efficiency with which a company uses its assets to generate sales. A higher Asset Turnover indicates better performance.

Historical asset turnover ratio of Manhattan Associates (MANH)

Manhattan Associates' Asset Turnover increased from 1.3823 in 2022 to 1.4937 in 2023. This trend is favorable, reflecting improved efficiency. Looking at the historical data, the company's asset turnover has generally trended upwards over the past 20 years, with some fluctuations, indicating overall long-term improvements. The increase from 2022 to 2023 signifies a 1-point positive score in the Piotroski analysis.


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