monday.com (MNDY) just released its latest earnings, showcasing revenue growth of 27% and outpacing expectations on important financial measures. Management sounded upbeat about scaling efficiently and maintaining momentum.
See our latest analysis for monday.com.
Despite these upbeat results, momentum has been hard to hold onto. monday.com’s share price delivered a 1-day gain of 4.7%, but is still down 17.9% year-to-date. Over the past year, the total shareholder return sits at a steep -41.5%, reflecting a sharp pullback from recent highs. Long-term holders are still up nearly 100% over three years. The stock’s recent moves signal investors are weighing short-term uncertainty against the company’s longer-term growth story.
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With shares trading well below analyst targets despite robust financials and upbeat management commentary, investors are left to wonder: is monday.com undervalued at current levels, or is the market already factoring in future growth?
monday.com’s fair value, according to the most widely followed narrative, lands significantly above its latest close. This outlook sees major catalysts on the horizon, setting up an intriguing argument for upside if the story unfolds as projected.
Ongoing global shift toward digital transformation, remote/hybrid work, and rising SaaS adoption continues fueling strong demand for cloud-based productivity and collaboration platforms like monday.com, supporting high double-digit revenue growth and future ARR expansion.
Read the complete narrative.
Want to unravel what powers this lofty target? There is a bold recipe driving these numbers: think rapid expansion and a turnaround in profit margins. The secret is in how recurring revenue and margin improvement factor into the forecast. What assumptions does the narrative make about the speed and scale of future growth? See the key numbers and logic for yourself.
Result: Fair Value of $266.33 (UNDERVALUED)
Have a read of the narrative in full and understand what’s behind the forecasts.
However, accelerating competition and slower customer additions could challenge monday.com’s ability to maintain its projected high growth and margin improvements in the future.
Find out about the key risks to this monday.com narrative.
Looking at price-to-sales, monday.com trades at 8.9x, which is noticeably steeper than the US Software sector average of 4.8x and its peer group at 8.5x. While the company’s growth prospects could justify a premium, the current multiple stands below the fair ratio of 11.9x. This may imply room for the stock to re-rate if market sentiment turns more positive. However, these multiples could also signal vulnerability if growth expectations fall short.