Monday.com (MNDY) AI Stock Analysis

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Monday.com

(NASDAQ:MNDY)

Rating:78Outperform

Price Target:―

Monday.com displays strong financial health with impressive revenue and cash flow growth, supported by efficient cost management and strategic initiatives. The high valuation is a concern, but the positive momentum and robust earnings guidance offset this to a degree. Macroeconomic uncertainties and potential declines in key performance metrics are risks to monitor.

Positive Factors

Financial Performance

Monday.com reported strong Q1 results with revenue growth of 30% and high profitability, maintaining Rule of 60 operating metrics.

Market Position

Monday.com's market position, growth initiatives, execution and potential create a bullish sentiment among investors.

Product and Market Fit

Monday.com has benefitted from terrific execution and a compelling product/market fit, yielding growth well above peers.

Negative Factors

Investor Expectations

Investor expectations for high 20%'s growth in FY25 and FY26 are already priced into shares, creating a more balanced risk/reward scenario.

Risk and Opportunity

Monday.com's move upmarket and expansion to multi-product comes with inherent risk despite representing a large opportunity.

Sales Strategy

The new Chief Revenue Officer joining earlier than expected could introduce disruptions as new sales leaders often adjust go-to-market plans.

Monday.com (MNDY) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$14.43B

Dividend YieldN/A

Average Volume (3M)450.87K

Price to Earnings (P/E)291.2

Beta (1Y)2.16

Revenue Growth32.25%

EPS Growth156.94%

CountryUS

Employees2,508

SectorTechnology

Sector Strength93

IndustrySoftware - Application

Share Statistics

EPS (TTM)1.10

Shares Outstanding50,773,340

10 Day Avg. Volume392,212

30 Day Avg. Volume450,873

Financial Highlights & Ratios

PEG Ratio1.37

Price to Book (P/B)8.22

Price to Sales (P/S)0.00

P/FCF Ratio686.76

Enterprise Value/Market Cap0.33

Enterprise Value/Revenue1.36

Enterprise Value/Gross Profit5.50

Enterprise Value/Ebitda-127.26

Forecast

1Y Price Target

$349.00

Price Target Upside20.41% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering19

Monday.com Business Overview & Revenue Model

Company Descriptionmonday.com Ltd., together with its subsidiaries, develops software applications in the United States, Europe, the Middle East, Africa, and internationally. It provides Work OS, a cloud-based visual work operating system that consists of modular building blocks used and assembled to create software applications and work management tools. The company also offers product solutions for marketing, CRM, project management, software development, and other fields; and business development, presale, and customer success services. It serves organizations, educational or government institution, and distinct business unit of an organization. The company was formerly known as DaPulse Labs Ltd. and changed its name to monday.com Ltd. in November 2017. monday.com Ltd. was incorporated in 2012 and is headquartered in Tel Aviv-Yafo, Israel.

How the Company Makes MoneyMonday.com generates revenue primarily through a subscription-based model. Customers pay for access to its platform on a per-user, per-month basis, with pricing tiers that vary based on the level of functionality and number of users. The company offers different plans such as Basic, Standard, Pro, and Enterprise, each with escalating features and support options. Additionally, Monday.com benefits from partnerships with other software providers, integrations with third-party applications, and marketplace expansions that enhance the platform's functionality and user appeal. This diversified approach to revenue generation is complemented by a focus on increasing customer lifetime value through upselling and expanding usage within existing accounts.

Monday.com Key Performance Indicators (KPIs)

Any

Customers Over $50K

Customers Over $50K
Indicates the number of large-scale clients generating significant revenue, highlighting the company’s ability to attract and retain high-value customers, which can drive stable and substantial growth.

Chart Insightsmonday.com has seen a consistent increase in customers spending over $50K, reflecting strong enterprise adoption and strategic growth. The latest earnings call highlights robust revenue growth and operational efficiency, driven by AI innovations and enterprise segment expansion. Despite macroeconomic uncertainties, the company's strategic initiatives and improved marketing efficiency position it well for sustained growth. However, management remains cautious about potential declines in net dollar retention, which could slightly temper future growth expectations.

Data provided by:

Main Street Data

Monday.com Earnings Call Summary

Earnings Call Date:May 12, 2025

(Q1-2025)

% Change Since: 4.17%|

Next Earnings Date:Aug 18, 2025

Earnings Call Sentiment Positive

monday.com demonstrated strong revenue growth and operational efficiency in Q1 2025, with significant expansion in the enterprise segment and successful adoption of AI features. However, the company remains cautious about macroeconomic uncertainties which may affect future performance.

Q1-2025 Updates

Positive Updates

Record Revenue Growth

monday.com reported a robust revenue growth of 30% year-over-year, achieving a total revenue of $282 million for Q1 2025.

Strong Operating Profit and Cash Flow

The company achieved record quarterly operating profit and generated its highest-ever cash flow for a single quarter, with adjusted free cash flow at $109.5 million, representing a 39% margin.

Enterprise Segment Growth

The enterprise segment continued to be the fastest-growing area, with new capabilities launched for the work management enterprise tier, offering enhanced visibility and control.

AI Adoption and Innovation

There was a significant increase in AI actions performed by users, up more than 150% since the end of 2024, reflecting rapid adoption of AI-powered features.

New Chief Revenue Officer

Casey George was appointed as Chief Revenue Officer, bringing extensive experience in scaling enterprise software organizations and driving strategic market expansion.

Improving Efficiency in Marketing

Sales and marketing expenses decreased as a percentage of revenue from 56% to 48% year-over-year, highlighting improving efficiency.

Negative Updates

Macroeconomic Uncertainty

Despite strong performance, management expressed concerns about macroeconomic uncertainty, impacting their conservative guidance for the rest of 2025.

Potential Decline in Net Dollar Retention

Net dollar retention (NDR) remained stable at 112%, but management expects it to be slightly below this figure by the end of the year due to market uncertainties.

Minor FX Impact

The company noted a negative impact from foreign exchange rates, although it is expected to be less than 1% for the entire fiscal year.

Company Guidance

During monday.com's Q1 Fiscal Year 2025 earnings call, the company provided optimistic guidance, projecting revenue for Q2 to range between $292 million and $294 million, reflecting a 24% to 25% year-over-year growth. For the full fiscal year 2025, monday.com expects revenue to be between $1,220 million and $1,226 million, representing a growth of 25% to 26% year-over-year. The company anticipates a non-GAAP operating income of $32 million to $34 million for Q2, translating to an operating margin of 11% to 12%, and a full-year non-GAAP operating income of $144 million to $150 million, with an operating margin of approximately 12%. Additionally, they forecast an adjusted free cash flow of $310 million to $316 million for the year, with a margin of 25% to 26%. Despite macroeconomic uncertainties, the company remains confident in its strategic initiatives and product offerings, expecting to maintain strong financial performance throughout the year.

Monday.com Financial Statement Overview

Summary

Monday.com demonstrates robust revenue growth with significant improvements in net income. The balance sheet shows strong liquidity and low leverage, while cash flow management remains efficient despite some volatility in investing and financing activities.

Income Statement

Very Positive

Monday.com has shown robust revenue growth with a significant increase from $161.12 million in 2020 to $971.99 million in 2024, indicating strong market demand for its software solutions. The gross profit margin remains high at approximately 89.33% in 2024, reflecting efficient cost management in delivering services. However, the company has struggled with profitability at the operating level, as evidenced by negative EBIT and EBITDA margins, although there's an improvement in net income with a margin of 3.33% in 2024.

Balance Sheet

Positive

The balance sheet of Monday.com demonstrates a strong liquidity position with cash and equivalents surpassing total debt, leading to a negative net debt situation. The debt-to-equity ratio is low due to minimal debt levels relative to equity, signaling financial stability. However, the equity ratio has room for improvement as it stands at 61.11% in 2024, suggesting potential for better asset utilization. The growth in stockholders' equity over the years is a positive indicator of financial health.

Cash Flow

Very Positive

Cash flow from operations has consistently increased, reaching $311.07 million in 2024, indicating strong cash-generating capabilities. The free cash flow has also grown significantly, enhancing financial flexibility. The free cash flow to net income ratio suggests efficient cash conversion, with free cash exceeding net income. However, the volatility in investing and financing cash flows requires attention to ensure sustainable cash management practices.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	972.00M	729.70M	519.03M	308.15M	161.12M
Gross Profit	868.30M	649.05M	452.50M	269.14M	138.63M
EBITDA	-9.18M	12.79M	-120.10M	-123.93M	-147.11M
Net Income	32.37M	-1.88M	-136.87M	-129.29M	-152.20M
Balance Sheet
Total Assets	1.69B	1.28B	1.04B	933.19M	157.42M
Cash, Cash Equivalents and Short-Term Investments	1.46B	1.12B	885.89M	886.81M	139.81M
Total Debt	106.04M	61.15M	77.72M	84.00K	21.10M
Total Liabilities	655.28M	462.15M	359.30M	229.80M	374.98M
Stockholders Equity	1.03B	813.51M	679.74M	703.39M	-217.56M
Cash Flow
Free Cash Flow	297.85M	204.94M	8.14M	2.60M	-42.66M
Operating Cash Flow	311.06M	215.40M	27.14M	16.36M	-37.17M
Investing Cash Flow	-70.81M	-10.46M	-19.00M	-3.63M	-11.48M
Financing Cash Flow	55.21M	25.29M	-9.05M	742.27M	8.47M

Monday.com Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price289.84

Price Trends

50DMA

295.36

Negative

100DMA

277.73

Positive

200DMA

274.84

Positive

Market Momentum

MACD

-1.29

Positive

RSI

46.01

Neutral

STOCH

17.74

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MNDY, the sentiment is Neutral. The current price of 289.84 is below the 20-day moving average (MA) of 297.75, below the 50-day MA of 295.36, and above the 200-day MA of 274.84, indicating a neutral trend. The MACD of -1.29 indicates Positive momentum. The RSI at 46.01 is Neutral, neither overbought nor oversold. The STOCH value of 17.74 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for MNDY.

Monday.com Peers Comparison

Overall Rating

UnderperformOutperform

Sector (51)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MNDY	78 Outperform	$14.43B	291.16	5.39%	―	32.25%	156.94%
PCTY	77 Outperform	$10.07B	46.86	19.70%	―	14.63%	17.15%
BSY	74 Outperform	$17.45B	73.20	25.20%	0.49%	10.71%	-27.64%
U	68 Neutral	$12.34B	―	-14.15%	―	-16.74%	49.75%
ASAN	64 Neutral	$3.32B	―	-83.36%	―	9.84%	13.74%
DUOL	61 Neutral	$17.20B	180.48	12.06%	―	39.14%	103.72%
Sector *	51 Neutral	AU$1.55B	2.02	-31.50%	3.11%	16.21%	-7.40%

* Technology Sector Average

Performance Comparison

MNDY

Monday.com

289.84

61.19

26.76%

PCTY

Paylocity

187.94

45.00

31.48%

Unity Software

36.52

20.31

125.29%

BSY

Bentley Systems

57.58

9.38

19.46%

ASAN

Asana

14.41

0.00

0.00%

DUOL

Duolingo

361.95

186.71

106.55%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: May 13, 2025