Manugistics shares surge on strong quarter
The supply-chain software maker's stock rises nearly 45 percent after it posts strong first-quarter results backed by solid sales growth.
Manugistics, which has seen its stock trade as low as $8.68 a share in the past year, got a much-needed lift in today's trading session. Shares climbed $13.50 to close at $38.38 on volume of about 4.7 million shares.
Meanwhile, a host of investment firms boosted their recommendations on the company's stock.
Analysts at Deutsche Banc Alex Brown raised their rating on the company's stock to "strong buy" from "buy." William Blair raised its rating to "buy" from "hold." Analysts at both Prudential Securities and Banc of America Securities reiterated their "strong buy" ratings.
After the closing bell yesterday, Manugistics posted a net loss of $1.2 million, or 4 cents a share, matching consensus estimates from First Call/Thomson Financial. In its comparable period a year ago, Manugistics reported net income of $400,000, or 1 cent a share.
Manugistics, which competes in the market for supply-chain management software against rival i2 Technologies, said software sales jumped 98 percent to $26 million from $13.1 million a year earlier. Total revenues for the quarter grew 29 percent to $50.5 million from $39.2 million in its year-ago period.
In research notes, Banc of America analyst Robert Austrian wrote that Manugistics delivered a strong quarter, helping to drive confidence in the "underappreciated" stock.
"We believe these results indicate that Manugistics is benefiting from a benign combination of accelerating market demand and an improved ability to execute," he wrote. Austrian also upped his software revenue growth estimate to 94 percent for the company's fiscal year 2001, from his previous estimate of 74 percent.
Despite the growing demand for supply-chain management software, or applications that help automate and manage a company's inventory and product-demand cycles, Manugistics has been somewhat overshadowed by its much noisier counterpart, i2.
In the past two years, Manugistics has suffered from both stiff market competition and internal sales-execution problems. However, in its latest quarter, the company boasts some major client wins, including online giant Amazon.com, which could help the company boost lagging momentum.
In recent months, i2, which is trading upward of $100 per share, has landed several lucrative deals and partnerships in the booming market for online trading exchanges. Earlier this month, i2 said it will help develop e2open.com, a new online marketplace serving the computer and communications industries. The company is working with partners Ariba and IBM to build the exchange. IBM recently made an equity investment in i2.