Analyst Derrick Wood of TD Cowen maintained a Buy rating on Monday.com, reducing the price target to $290.00.
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Derrick Wood has given his Buy rating due to a combination of factors influencing Monday.com’s current market position and future potential. Despite a softer than expected performance in the second quarter, with a growth rate of 27%, the company has shown resilience in its enterprise segment, achieving record net additions. The stock has experienced a significant decline of 30%, which has led to a valuation that Wood sees as disconnected from its growth profile, presenting a buying opportunity at current levels.
Management’s strategic shift in lead generation efforts, moving away from reliance on Google’s AI search trends, is expected to yield positive results in the latter half of the year. Additionally, the company’s focus on expanding its CRM offerings into the mid-market segment, where average contract values are higher, has already shown early success. With the introduction of new AI products and the potential for increased AI-related revenue, Wood anticipates that Monday.com is well-positioned for a rebound, especially with upcoming strategic updates expected at the Analyst Day. Therefore, he maintains a Buy rating with a price target of $290.