A Fresh Look at monday.com (MNDY) Valuation After Earnings Beat and Softer Guidance

Monday.com (MNDY) stock drew fresh attention after the company posted better than expected earnings. Management, however, cautioned about a softer outlook as macro pressures and changes in lead-generation strategies impacted future guidance.

See our latest analysis for monday.com.

Shares of monday.com have struggled for momentum this year, with a 1-year total shareholder return of -34.7% and a 15% year-to-date share price drop, reflecting shifting market sentiment. While recent hedge fund activity and mention in a leading growth fund show lingering investor interest, a steeper 25% slide over the last 90 days signals that near-term momentum is fading. This trend comes as macro headwinds and evolving lead-generation strategies weigh on the outlook.

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With monday.com now trading well below its analyst price target but facing growth uncertainties, the question for investors is clear: does this represent a discounted entry point, or is the market already factoring in the road ahead?

Most Popular Narrative: 26% Undervalued

With monday.com trading nearly $71 below its most widely-followed fair value estimate, investor attention turns to what could close this gap. The latest narrative highlights key strategic bets and bold expectations shaping the price outlook.

Multi-product strategy, with accelerated growth in CRM and Service verticals, expands total addressable market and drives more cross-sell/upsell opportunities. This increases both seat expansion and average deal size, translating to higher enterprise revenue and durable earnings growth.

Read the complete narrative.

Curious what makes this valuation possible? The answer lies in aggressive assumptions for future growth and margins, and a profit trajectory more typical of dominant market winners. Wondering which specific financial milestones underpin this bullish stance? Click in to unlock the full playbook behind the narrative.

Result: Fair Value of $266 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, slowing customer acquisition and the growing challenge of digital marketing shifts could undermine current growth projections and dampen monday.com's bullish outlook.

Find out about the key risks to this monday.com narrative.

Another View: Market Comparison Tells a Different Story

Looking from a market perspective, monday.com trades at a price-to-sales ratio of 9.2x, notably higher than the US Software industry average of 5.2x and its peer group at 8.3x. While this signals a premium price, the fair ratio our models suggest is actually 12.3x. The gap raises interesting questions: is the premium justified, or could there be further upside if the market re-rates?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own monday.com Narrative

If the story does not line up with your own analysis, or you want a hands-on approach, dive into the data and shape your perspective in just minutes: Do it your way

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding monday.com.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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