Last Update 07 Dec 25

Fair value Increased 0.26%

MNDY: Upmarket Expansion And AI Adoption Will Drive Medium-Term Upside

Our monday.com price target has been trimmed slightly to approximately $235 per share, as analysts modestly recalibrate assumptions around discount rates and longer sales cycles while still highlighting the company's resilient upmarket momentum and multi product growth opportunity.

Analyst Commentary

Street research has turned more balanced following the latest earnings print, with most firms trimming price targets but maintaining constructive long term views on monday.com's competitive position and growth algorithm. The debate now centers on the durability of upmarket execution and multi product expansion relative to near term demand friction and a higher execution bar embedded in prior expectations.

Bullish Takeaways

Bullish analysts highlight that despite lowered price targets, ratings remain largely positive, indicating confidence that the recent pullback has improved the risk reward profile relative to the company's multiyear growth opportunity.
Several reports underscore accelerating RPO bookings, stronger $50k plus net dollar retention, and improving large customer additions, which support a thesis of durable upmarket expansion and a mix shift toward higher value cohorts.
Management's reaffirmed 2027 revenue target of approximately $1.8 billion and commentary around better than expected AI adoption and multi product traction are viewed as underappreciated drivers of medium term revenue scale and margin leverage.
Some bullish analysts see monday.com as one of the more differentiated high growth, high margin software assets, arguing that conservative guidance and trimmed targets reset expectations to levels that are more achievable, which can rebuild credibility over the next several quarters.

Bearish Takeaways

Bearish analysts focus on elongating sales cycles, softer small business net new additions, and choppiness in the lower end of the market, which together point to slower near term bookings and greater macro sensitivity than previously assumed.
The lack of a fiscal 2025 revenue raise, a skinnier beat versus prior quarters, and a Q4 outlook that modestly missed consensus are seen as signs that the company's historic beat and raise cadence may be normalizing, which could pressure the premium valuation.
Concerns are rising that early AI related search and top of funnel headwinds, combined with inconsistent execution, are feeding into a broader bear narrative on horizontal software vendors, potentially capping multiple expansion until growth re accelerates.
At least one cautious view now sees incremental risk to the 2027 revenue outlook, arguing that the current transition upmarket, while strategically sound, introduces greater forecasting uncertainty and raises the bar for sustained high twenties growth off a larger base.

What's in the News

Announced a three year partnership as the Official Global Work Management Partner of the Bonds Flying Roos, the Australian SailGP team co owned by Hugh Jackman and Ryan Reynolds, supporting mission critical racing operations across continents (Client Announcements).
Highlighted as a key multi year partner of the Bonds Flying Roos alongside Blueberry, with monday.com unifying performance planning, logistics, content production, and race week execution on its AI first platform (Client Announcements).
Issued guidance for fourth quarter 2025 revenue of $328 million to $330 million, up 22 percent to 23 percent year over year, and full year 2025 revenue of $1,226 million to $1,228 million, representing approximately 26 percent growth (Corporate Guidance).
Authorized a share repurchase program of up to $870 million of ordinary shares, following board approval of a buyback plan in mid September 2025 (Buyback Transaction Announcements).
Unveiled the next wave of AI driven product innovations at its Elevate customer conference, including monday agents, monday magic, monday vibe, monday sidekick, and the new monday campaigns product within monday CRM, with early customers already building over 17,000 apps on monday vibe (Product Related Announcements).

Valuation Changes

Fair Value: Risen slightly from approximately $234.58 to $235.20 per share, reflecting a modest upward adjustment in intrinsic value assumptions.
Discount Rate: Increased slightly from about 10.62 percent to 10.71 percent, implying a marginally higher required return and risk premium.
Revenue Growth: Essentially unchanged, with the estimate holding at roughly 20.52 percent, indicating stable top line growth expectations.
Net Profit Margin: Fallen slightly from around 10.69 percent to 10.65 percent, suggesting a modestly more conservative long term profitability outlook.
Future P/E: Risen slightly from about 78.56x to 79.32x, pointing to a small uptick in the multiple applied to forward earnings.

Expanding AI and automation capabilities boost platform differentiation, enhancing customer retention, upselling, and overall profitability.
Multi-product and upmarket strategies increase enterprise traction and cross-selling, supporting sustainable growth and strong market positioning.
Heavy investment in growth, reliance on performance marketing, and increased competition create risks to customer acquisition, revenue expansion, and long-term profitability.

Catalysts

About monday.com

Develops software applications in the United States, Europe, the Middle East, Africa, the United Kingdom, and internationally.What are the underlying business or industry changes driving this perspective?

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.
Rapid integration of generative AI and low-code/no-code capabilities (e.g., Monday Magic, Vibe, Sidekick) enable broader automation and workflow customization, strengthening platform differentiation and stickiness-likely improving customer retention, ARPU, and net margins as monetization scales.
Multi-product strategy, with accelerated growth in CRM and Service verticals, expands total addressable market and drives more cross-sell/upsell opportunities, increasing both seat expansion and average deal size-translating to higher enterprise revenue and durable earnings growth.
Upmarket momentum and record enterprise customer adds (>$100K ARR) point to sustained large-account penetration; this enhances recurring revenue visibility and supports margin improvement through operating leverage as sales and R&D investments normalize.
Strong balance sheet (>$1.5B in cash), disciplined cost structure, and focus on organic/inorganic growth (including AI-driven features and potential M&A) position monday.com to benefit disproportionately from industry consolidation and drive sustained free cash flow and earnings growth.

monday.com Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming monday.com's revenue will grow by 22.9% annually over the next 3 years.
Analysts assume that profit margins will increase from 3.6% today to 7.7% in 3 years time.
Analysts expect earnings to reach $157.5 million (and earnings per share of $2.78) by about September 2028, up from $40.0 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $183 million in earnings, and the most bearish expecting $102.4 million.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 136.2x on those 2028 earnings, down from 249.7x today. This future PE is greater than the current PE for the US Software industry at 36.2x.
Analysts expect the number of shares outstanding to grow by 2.83% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 10.68%, as per the Simply Wall St company report.

monday.com Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Heavy reliance on performance marketing, particularly Google Search, exposes monday.com to risks from evolving search algorithms and AI-driven SEO changes; recent softness in SMB customer additions due to search changes could hinder new customer acquisition, pressuring future revenue growth.
Elevated R&D and sales/marketing spend (20% and 47% of revenue in Q2, respectively) and 30% headcount growth reflect an aggressive investment cycle that, if not matched by higher long-term revenue growth or operating leverage, may result in sustained margin compression and lower net earnings.
Slower customer additions and pressure in the low-end SMB segment-as noted in CRM and other products-suggest increased vulnerability to market saturation, competitive pricing, or macroeconomic headwinds, potentially impeding future revenue and ARR expansion.
Intensifying competition from both SaaS giants and specialist workflow startups, as well as the proliferation of low-code/no-code platforms, may commoditize core workflow management features and limit the company's ability to sustain pricing power, risking long-term revenue and ARPU growth.
The transition to prioritizing upmarket expansion (enterprise segment) and new product cross-sell introduces execution risk, including possible delays in reaching an inflection point in growth and uncertainties around the effectiveness of newly appointed executives, which could result in slower than anticipated improvement in net dollar retention or revenue growth.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $282.458 for monday.com based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $450.0, and the most bearish reporting a price target of just $205.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $2.0 billion, earnings will come to $157.5 million, and it would be trading on a PE ratio of 136.2x, assuming you use a discount rate of 10.7%.
Given the current share price of $193.63, the analyst price target of $282.46 is 31.4% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

AI And Product Expansion Will Drive Market Leadership in Coming Years