monday.com (NASDAQ:MNDY) adds US$462m to market cap in the past 7 days, though investors from a year ago are still down 61%

This month, we saw the monday.com Ltd. (NASDAQ:MNDY) up an impressive 33%. But that doesn't change the fact that the returns over the last year have been disappointing. During that time the share price has sank like a stone, descending 61%. It's not that amazing to see a bounce after a drop like that. You could argue that the sell-off was too severe.

While the stock has risen 10% in the past week but long term shareholders are still in the red, let's see what the fundamentals can tell us.

Check out our latest analysis for monday.com

monday.com isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last year monday.com saw its revenue grow by 77%. That's well above most other pre-profit companies. Meanwhile, the share price slid 61%. Typically a growth stock like this will be volatile, with some shareholders concerned about the red ink on the bottom line (that is, the losses). We'd definitely consider it a positive if the company is trending towards profitability. If you can see that happening, then perhaps consider adding this stock to your watchlist.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

monday.com is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. So we recommend checking out this free report showing consensus forecasts

A Different Perspective

monday.com shareholders are down 61% for the year, even worse than the market loss of 14%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. With the stock down 2.5% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. It's always interesting to track share price performance over the longer term. But to understand monday.com better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for monday.com (of which 1 can't be ignored!) you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

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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.