Can Manhattan Associates Stock Compound Your Money?
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Manhattan Associates (MANH) stock has returned 59.7% since July 24, 2026, compared with 3.7% for the S&P 500. In the year before that run, the company kept buying back its own shares. It finished its latest four quarters with 59.0 million diluted shares, down from 62.4 million three years earlier. This reduction leaves each remaining share with a larger stake in the business. So how much has the shrinking share count added to what each of your shares earns?
Manhattan Associates’ Earnings Per Share Outgrew Net Income
A shrinking share count has helped earnings per share grow faster than net income. Over the three years to June 2026, earnings per share climbed 14.6% a year, while net income increased 12.9% a year. Although the number of shares an investor holds remains the same, each one claims a larger portion of the profit.
In the past year, the buyback softened a decline instead. Net income fell 4.9% during the four quarters to June 2026, but earnings per share dropped a smaller 2.5%. Over those four quarters, the company spent $321 million more on buybacks than it issued in stock pay. That difference equals 2.3% of its market value at the October 22 close.
What Pays For Manhattan Associates’ Buyback?
Most of this activity is funded by spare cash from a profitable software business. Over its latest four quarters, Manhattan Associates recorded an operating margin of 25.1%, compared with 18.5% for the S&P 500. Cash from operations reached $415 million, twice its net income. Capital spending consumed just 3.8% of that cash, leaving almost all of it as free cash flow.
The business generating that cash is still growing. Cloud revenue rose 26% to $127 million in fiscal Q2 2026. On the July 28, 2026 call, management said revenue already under contract but not yet booked reached $2.47 billion, up 23% from a year earlier.
Can Manhattan Associates Keep Buying Back At This Pace?
Not from free cash flow alone. Over the past four quarters, free cash flow covered 0.92 times the $435 million spent on buybacks, and the company paid no dividend. The rest came from its cash, which dropped to $186 million at the end of June 2026 from $231 million a year earlier. Even so, cash still exceeds debt by $132 million.
Each repurchased share also comes at a high price: the stock trades at 67.7 times earnings, compared with 23.0 for the S&P 500. As a result, every dollar spent retires a smaller slice of the company than it would at a lower price. The $225 million left under its share repurchase authority at the July 28 call would buy about 930,000 shares at the October 22 close of $242.17. In July, management also lowered its full-year GAAP operating margin forecast to 24.3% at the midpoint, down from 24.8%. This means a smaller share of each sales dollar is expected to remain as profit to pay for those purchases.
The Manhattan Associates buyback has added to what each share earns. Over the past year, however, the company spent more than the free cash flow its business produced. Keeping that pace would draw further on its cash. Free cash flow against buyback spending is the measure to watch when Manhattan Associates reports its fiscal Q3 2026 results, expected on October 27, 2026.
Is Too Much Of Your Wealth Riding On One Stock?
Owning Manhattan Associates for its buybacks is a bet that takes years to pay off. When one position grows into a large part of your wealth, a sharp fall can hurt your whole plan, and selling to spread the money out can bring a large tax bill. Our partner advisory firm offers a free strategy review of ways to protect a concentrated position and unwind it with less tax.
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