Manhattan Associates, Inc. reports 18.3 pp ROIC decline from 71.7% to 53.4% in 2020 in 2020 and 1.1% EBITDA decline
02/02/2021 • About Manhattan Associates, Inc. (
$MANH) • By InTwits
Manhattan Associates, Inc. reported 2020 financial results today. Here are the key drivers of the company's long term financial model:
- Manhattan Associates, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.3%. At the same time it's in pair with industry average of 14.0%
- CAPEX is quite volatile: $3m in 2020, $15m in 2019, $7m in 2018, $6m in 2017, $7m in 2016
- The company has highly profitable business model: ROIC is 53.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue decreased on 5.1%. Annual revenue decline showed slowdown in 20Q4 - revenue decreased on 3.8%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased slightly on 0.91 pp from 21.3% to 22.3% in 2020. EBITDA Margin stuck to a declining trend at -3.4 pp per annum in the last 5 years.
Gross Margin showed almost no change in 2020. Gross Margin declined at -1.4 pp per annum in 2016-2020. SG&A as a % of Revenue decreased slightly on 1.0 pp from 19.7% to 18.6% in 2020.
Net Income margin increased slightly on 1.00 pp from 13.9% to 14.9% in 2020. Net Income margin declined at -1.7 pp per annum in the last 5 years.
Investments (CAPEX, working capital and M&A)
In 2020 Manhattan Associates, Inc. had CAPEX/Revenue of 0.47%. The company showed small CAPEX/Revenue decline of 0.58 pp from 1.0% in 2017 to 0.47% in 2020. Average CAPEX/Revenue for the last three years was 1.4%.
Return on investment
The company operates at high and attractive ROIC (53.4%) and ROE (48.3%). ROIC dropped on 18.3 pp from 71.7% to 53.4% in 2020. ROE dropped on 11.0 pp from 59.3% to 48.3% in 2020. ROIC declined at -12.3 pp per annum in 2016-2020. ROE stuck to a declining trend at -4.8 pp per annum in 2016-2020.
Leverage (Debt)
Debt level is -1.3x Net Debt / EBITDA and 0.3x Debt / EBITDA. Debt dropped on 12.0% while cash jumped on 85.0%.
Manhattan Associates, Inc. has no short term refinancing risk: cash is higher than short term debt (3,116.2%).
Valuation and dividends
Manhattan Associates, Inc.'s trades at EV/EBITDA 65.9x and P/E 100.5x.
Management team
The company's CEO Eddie Capel has spent 8 years with the company. Manhattan Associates, Inc.'s CFO Dennis B Story has spent 15 years with the company.
Financial and operational results
FY ended 12/31/2020
Manhattan Associates, Inc. ($MANH) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 604.6 | 594.6 | 559.2 | 617.9 | 586.4 | -5.1% |
| Gross Profit | 354.7 | 348.9 | 318.3 | 333.0 | 316.5 | -5.0% |
| SG&A | 96.5 | 93.5 | 103.9 | 121.5 | 109.2 | -10.1% |
| EBITDA | 203.4 | 194.7 | 142.5 | 131.9 | 130.5 | -1.1% |
| EBIT | 194.3 | 185.6 | 133.9 | | | |
| Tax | 71.9 | 68.4 | 31.5 | | | |
| Net Income | 124.2 | 116.5 | 104.7 | 85.8 | 87.2 | 1.7% |
| Stock Based Compensation | 15.9 | 16.2 | 19.9 | | | |
Balance Sheet
|
|---|
| Cash | 95.6 | 125.5 | 99.1 | 110.7 | 204.7 | 85.0% |
| Accounts Receivable | 100.3 | 92.2 | 100.1 | | | |
| Accounts Payable | 12.1 | 14.0 | 18.2 | | | |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 6.7 | 6.6 | -1.7% |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 32.4 | 27.8 | -14.1% |
Cash flow
|
|---|
| Capex | 6.8 | 6.2 | 7.3 | 15.2 | 2.7 | -82.0% |
Ratios
|
|---|
| Revenue growth | 8.7% | -1.6% | -6.0% | 10.5% | -5.1% | |
| EBITDA growth | 20.2% | -4.3% | -26.8% | -7.4% | -1.1% | |
|
|---|
| Gross Margin | 58.7% | 58.7% | 56.9% | 53.9% | 54.0% | 0.1% |
| EBITDA Margin | 33.6% | 32.7% | 25.5% | 21.3% | 22.3% | 0.9% |
| EBIT Margin | 32.1% | 31.2% | 23.9% | | |
| SG&A, % of revenue | 16.0% | 15.7% | 18.6% | 19.7% | 18.6% | -1.0% |
| SBC, % of revenue | 2.6% | 2.7% | 3.6% | | |
| Net Income Margin | 20.5% | 19.6% | 18.7% | 13.9% | 14.9% | 1.0% |
| CAPEX, % of revenue | 1.1% | 1.0% | 1.3% | 2.5% | 0.5% | -2.0% |
|
|---|
| ROIC | 99.3% | 102.5% | 80.9% | 71.7% | 53.4% | -18.3% |
| ROE | 68.1% | 67.7% | 65.0% | 59.3% | 48.3% | -11.0% |
| Net Debt/EBITDA | -0.5x | -0.6x | -0.7x | -0.5x | -1.3x | -0.8x |
People
|
|---|
| Insider ownership | 1.5% | 1.5% | 1.5% | | | |
| Employees | 1,550 | 2,790 | 3,000 | | | |
| Revenue/Employee, th. $ | 390 | 213 | 186 | | | |
Manhattan Associates, Inc. ($MANH) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 154 | 136 | 150 | 147 | | 3.7% | -12.1% | -7.7% | -3.8% |
| EBITDA | 28 | 31 | 37 | 32 | | -11.4% | -2.2% | -4.8% | 9.9% |
| Net Income | 23 | 19 | 25 | 21 | | 7.4% | -8.2% | -7.9% | 22.6% |
Balance Sheet
|
|---|
| Cash | 75 | 124 | 166 | 205 | | -28.2% | 3.5% | 46.3% | 85.0% |
| Short Term Debt | 7 | 7 | 7 | 7 | | 0.5% | -4.0% | 0.8% | -1.7% |
| Long Term Debt | 30 | 28 | 28 | 28 | | -16.2% | -20.6% | -18.6% | -14.1% |
Ratios
|
|---|
| Gross Margin | 51.4% | 53.5% | 56.5% | 54.6% | | -3.4% | -0.1% | 2.3% | 1.5% |
| EBITDA Margin | 18.5% | 22.7% | 24.8% | 21.9% | | -3.1% | 2.3% | 0.8% | 2.7% |
| Net Income Margin | 14.6% | 14.2% | 16.7% | 14.0% | | 0.5% | 0.6% | -0.0% | 3.0% |
Peers in Application Software
Below you can find Manhattan Associates, Inc. benchmarking vs. other companies in Application Software industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VirnetX Holding Corp ($VHC) | - | -0.2% | -95.9% | 34.9% | 355,942.4% |
| AudioEye, Inc. ($AEYE) | - | 175.5% | 106.6% | 90.2% | 90.2% |
| Cloudera, Inc. ($CLDR) | - | 57.2% | 42.6% | 28.9% | 65.5% |
| Integrated Ventures Inc ($INTV) | - | - | - | -8.9% | 62.7% |
| Smartsheet Inc. ($SMAR) | - | 64.3% | 66.1% | 59.7% | 52.4% |
| |
|---|
| Median (92 companies) | 12.0% | 15.7% | 15.2% | 19.5% | 14.7% |
|---|
| Manhattan Associates, Inc. ($MANH) | - | -1.6% | -6.0% | 10.5% | -5.1% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Aware, Inc. ($AWRE) | 90.3% | 94.6% | 92.3% | 89.7% | 92.8% |
| Alteryx, Inc. ($AYX) | 81.3% | 83.4% | 91.0% | 90.6% | 91.1% |
| Autodesk, Inc. ($ADSK) | 85.2% | 83.2% | 85.2% | 88.9% | 90.1% |
| Smith Micro Software, Inc. ($SMSI) | 73.2% | 77.9% | 83.5% | 90.9% | 89.9% |
| Cadence Design Systems, Inc. ($CDNS) | 85.9% | 87.8% | 87.9% | 88.6% | 88.6% |
| |
|---|
| Median (89 companies) | 64.2% | 64.6% | 66.0% | 68.4% | 70.6% |
|---|
| Manhattan Associates, Inc. ($MANH) | 58.7% | 58.7% | 56.9% | 53.9% | 54.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VirnetX Holding Corp ($VHC) | -1,837.2% | -1,118.0% | -40,379.4% | -23,127.1% | 52.2% |
| j2 Global, Inc. ($JCOM) | 41.7% | 36.5% | 35.7% | 38.6% | 40.5% |
| Intelligent Systems Corporation ($INS) | -5.4% | -12.8% | 33.6% | 43.6% | 40.4% |
| Adobe Inc. ($ADBE) | 31.2% | 34.2% | 35.3% | 35.8% | 39.7% |
| SS&C Technologies Holdings, Inc. ($SSNC) | 34.9% | 37.9% | 27.7% | 38.2% | 38.3% |
| |
|---|
| Median (89 companies) | -5.3% | -4.2% | -3.3% | 2.7% | 6.8% |
|---|
| Manhattan Associates, Inc. ($MANH) | 33.6% | 32.7% | 25.5% | 21.3% | 22.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| MicroStrategy Incorporated ($MSTR) | 0.5% | 0.8% | 1.4% | 2.1% | 234.8% |
| Integrated Ventures Inc ($INTV) | - | - | 199.9% | 15.2% | 27.2% |
| Intelligent Systems Corporation ($INS) | 3.8% | 9.7% | 4.3% | 4.9% | 19.2% |
| LivePerson, Inc. ($LPSN) | 5.5% | 7.9% | 8.8% | 16.3% | 11.4% |
| PROS Holdings, Inc. ($PRO) | 4.7% | 0.8% | 0.7% | 2.1% | 11.3% |
| |
|---|
| Median (87 companies) | 3.0% | 2.3% | 2.4% | 3.0% | 2.6% |
|---|
| Manhattan Associates, Inc. ($MANH) | 1.1% | 1.0% | 1.3% | 2.5% | 0.5% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VirnetX Holding Corp ($VHC) | -210.9% | -256.8% | -416.3% | -247.2% | 137.3% |
| Citrix Systems, Inc. ($CTXS) | 16.1% | 16.7% | 25.2% | 29.8% | 33.5% |
| Sonic Foundry, Inc. ($SOFO) | -18.1% | -50.6% | -786.4% | - | 31.3% |
| Paycom Software, Inc. ($PAYC) | 75.4% | 51.1% | 47.5% | 47.5% | 28.7% |
| Adobe Inc. ($ADBE) | 15.9% | 21.3% | 23.3% | 22.9% | 26.9% |
| |
|---|
| Median (92 companies) | -9.8% | -11.8% | -10.6% | -4.5% | -2.2% |
|---|
| Manhattan Associates, Inc. ($MANH) | 99.3% | 102.5% | 80.9% | 71.7% | 53.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Dropbox, Inc. ($DBX) | - | -3.8x | - | 2.4x | 1,341.0x |
| Avaya Holdings Corp. ($AVYA) | - | - | 7.4x | - | 77.9x |
| Alteryx, Inc. ($AYX) | - | - | 2.5x | 6.1x | 32.2x |
| Five9, Inc. ($FIVN) | -6.7x | -8.6x | 7.3x | 5.3x | 17.6x |
| Synchronoss Technologies, Inc. ($SNCR) | - | - | - | - | 11.6x |
| |
|---|
| Median (53 companies) | -0.9x | -0.9x | -0.6x | 0.4x | 0.3x |
|---|
| Manhattan Associates, Inc. ($MANH) | -0.5x | -0.6x | -0.7x | -0.5x | -1.3x |
