Core Viewpoint - monday.com (MNDY) has experienced a significant decline in share price, losing 20.9% over the past six months, which is worse than the broader Zacks Computer and Technology sector and the Zacks Internet - Software industry [1] Group 1: Financial Performance and Outlook - The company's cautious outlook for fiscal 2025 indicates potential headwinds, with expected revenue growth moderating to 24-26%, down from a 33% rise in 2024 [3] - A projected non-GAAP operating margin of 11-12% for 2025 reflects a decline from 14% in the prior year, attributed to increased investments in sales infrastructure [4] - The Zacks Consensus Estimate for 2025 revenues is $1.21 billion, indicating a year-over-year increase of 24.81% [4] - The consensus mark for 2025 earnings is $3.30 per share, reflecting a year-over-year decline of 5.71% [5] Group 2: Strategic Initiatives - monday.com is focusing on AI-driven product innovation, with a strategy centered around AI Blocks, Product Power-ups, and a Digital Workforce to enhance automation and scalability [6] - The introduction of AI Blocks allows users to integrate AI capabilities into workflows, with customers performing approximately 10 million AI actions by the end of 2024 [7] - The Digital Workforce includes AI-powered agents for continuous operation, with the first agent, monday Expert, released in March 2025 [8] - The company has launched monday service, an Enterprise Service Management platform that has resolved over 215,000 tickets, improving efficiency in enterprise IT service [9] Group 3: Market Position and Growth Potential - In 2024, monday.com completed mondayDB 2.0, enhancing its platform's ability to support larger use cases, and grew its largest customer seat count to 80,000 [10] - The company aims to build on its momentum in 2025 by expanding reach, enhancing product capabilities, and leading through innovation in AI and workflow automation [11] - Despite the cautious outlook for 2025, monday.com is well-positioned for long-term success due to its strong momentum in AI-led innovation and growing enterprise adoption [12]

Core Viewpoint - Analyst recommendations play a significant role in influencing stock prices, but their reliability is questionable due to potential biases from brokerage firms [1][10]. Group 1: Analyst Recommendations - Monday.com (MNDY) has an average brokerage recommendation (ABR) of 1.26, indicating a consensus between Strong Buy and Buy, with 82.6% of recommendations being Strong Buy [2]. - The ABR is based on recommendations from 23 brokerage firms, with 19 Strong Buy and 2 Buy [2]. - Despite the positive ABR, relying solely on this information for investment decisions may not be wise, as studies show limited success in using brokerage recommendations for stock selection [5]. Group 2: Limitations of Brokerage Recommendations - Brokerage analysts often exhibit a strong positive bias due to vested interests, leading to a disproportionate number of Strong Buy recommendations compared to Strong Sell [6][10]. - The best use of brokerage recommendations may be to validate independent research rather than as a primary decision-making tool [7]. Group 3: Zacks Rank vs. ABR - Zacks Rank, a proprietary stock rating tool, categorizes stocks from Strong Buy to Strong Sell and is based on earnings estimate revisions, which correlate strongly with near-term stock price movements [8][11]. - Unlike ABR, Zacks Rank is timely and reflects the latest earnings estimates, making it a more reliable indicator for predicting future stock prices [12]. - For Monday.com, the Zacks Consensus Estimate for the current year remains unchanged at $3.29, leading to a Zacks Rank of 3 (Hold) [13][14].

Company Performance - Monday.com (MNDY) closed at $221.01, reflecting a +1.49% change from the previous trading day's closing, outperforming the S&P 500's loss of 0.23% [1] - The stock has dropped by 13.67% in the past month, which is better than the Computer and Technology sector's loss of 16.18% but worse than the S&P 500's loss of 12.13% [1] Earnings Expectations - Analysts expect Monday.com to post earnings of $0.68 per share, indicating year-over-year growth of 11.48% [2] - The consensus estimate projects revenue of $275.04 million, reflecting a 26.8% rise from the same quarter last year [2] Full Year Projections - For the full year, earnings are projected at $3.27 per share, representing a -6.57% change from the prior year, while revenue is expected to be $1.22 billion, reflecting a +25.01% change [3] Analyst Estimates - Recent changes in analyst estimates for Monday.com are important as they reflect evolving short-term business trends, with upward revisions indicating analysts' positivity towards the company's operations [4] Valuation Metrics - Monday.com has a Forward P/E ratio of 66.62, significantly higher than the industry average of 23.71, suggesting it is trading at a premium [7] - The company holds a PEG ratio of 1.63, compared to the industry average PEG ratio of 1.77 [7] Industry Context - The Internet - Software industry, part of the Computer and Technology sector, holds a Zacks Industry Rank of 82, placing it in the top 34% of all industries [8]

Core Viewpoint - monday.com (MNDY) has underperformed the Zacks Internet – Software industry, with a 13.1% gain over the past 12 months compared to the industry's 18.5% [1] Group 1: Company Performance and Challenges - The company's underperformance is attributed to macroeconomic uncertainty affecting enterprise spending, elongating sales cycles, and high customer acquisition costs, leading to revenue unpredictability [2] - Fluctuations in attrition rates due to customer dissatisfaction and economic downturns could further pressure revenue growth in upcoming quarters [2] - Despite challenges, monday.com achieved strategic expansion into the enterprise market, growing its seat count to 80,000 and adding a record number of net new accounts in the CRM and Dev segments [4] Group 2: Competitive Landscape - monday.com faces long-term competition from Asana, HubSpot, and Freshworks, which offer similar platforms [3] - To compete effectively, monday.com must focus on introducing new features and increasing product acceptance [3] - Shares of competitors Asana, HubSpot, and Freshworks have seen declines of 4.6%, 5.4%, and 16.9% respectively over the past 12 months [3] Group 3: Financial Outlook - The company expects revenues in the range of $274.5-$276 million for Q1 2025, indicating a year-over-year growth of 26-27% [5] - The Zacks Consensus Estimate for MNDY's Q1 2025 revenues is $277.66 million, suggesting a 28.01% year-over-year increase [5] - The consensus estimate for earnings is 68 cents per share, reflecting an 11.48% year-over-year growth [6] Group 4: Strategic Initiatives and Future Prospects - monday.com reached $1 billion in annual recurring revenues in 2024, highlighting the strength of its Work OS platform [7] - The company completed the latest phase of mondayDB, enhancing the platform's scalability for larger use cases [7] - AI-driven innovations are expected to drive new features and integrations, positioning monday.com for long-term growth as digital work management solutions gain traction [7] Group 5: Investment Considerations - monday.com currently holds a Zacks Rank 3 (Hold), suggesting that investors may want to wait for a more favorable entry point in 2025 [8]

monday.com Ltd. (NASDAQ: MNDY ) (Monday for short) has been one of the cleanest software stories available to investors over the last three years.Whether you're just getting started or are an analyst at a hedge fund, Louis has served folks like yourself throughout his career in equity research and investing. Learn moreAnalyst’s Disclosure: I/we have a beneficial long position in the shares of MNDY, SNOW either through stock ownership, options, or other derivatives. I wrote this article myself, and it expres ...

Customer Base and Market Presence - As of December 31, 2024, the company served nearly 245,000 customers across over 200 industries in more than 200 countries and territories[32]. - The number of paying customers increased to nearly 245,000 as of December 31, 2024, up from over 225,000 as of December 31, 2023[209]. - The number of enterprise customers grew by 39% from 2,295 as of December 31, 2023, to 3,201 as of December 31, 2024[212]. - Customers with more than $100,000 in ARR grew by 45% during the 12 months ending December 31, 2024, from 833 to 1,207[213]. - The company aims to increase its global presence by investing in local advertising channels and partnerships[46]. - The company has 272 channel partners across 50 countries, enhancing its market reach and providing professional services[110]. Financial Performance - Revenue for the year ended December 31, 2024, was $972.0 million, representing a 33% increase from $729.7 million in 2023 and a 68% increase from $519.0 million in 2022[47]. - Net income for the year ended December 31, 2024, was $32.4 million, a significant improvement from a net loss of $1.9 million in 2023[211]. - Free cash flow for the year ended December 31, 2024, was $295.8 million, up from $204.9 million in 2023 and $8.1 million in 2022[47]. - Annual Recurring Revenue (ARR) from enterprise customers increased by 47% from December 31, 2023, to December 31, 2024[212]. - The company does not expect to pay dividends for the foreseeable future, indicating a focus on reinvestment[29]. Product Development and Innovation - The company has begun incorporating AI capabilities throughout its platform to enhance functionality and user experience[31]. - The company has a history of technological innovation, regularly updating its platform to maintain competitiveness[37]. - The platform is designed as a no-code and low-code framework, allowing users to build applications and management tools tailored to their needs[31]. - The company plans to continue investing in research and development to enhance its platform and introduce new use cases and enterprise-grade features[38]. - The company released mondayDB 2.0 in 2024, which supports boards with up to 10x more items and 25x more dashboards, enhancing performance and scalability[95]. - The newly released Guardian add-on enhances data protection and governance, featuring tenant-level encryption and multiple SSO capabilities[131]. Customer Engagement and Support - The company emphasizes the importance of customer support and retention strategies to grow its user base[26]. - The customer success teams focus on upselling and driving value for customers, with a strategy that includes more face-to-face interactions in 2024 to strengthen relationships[115]. - The company employs a multi-product marketing strategy to expand brand awareness and lead generation, targeting potential customers at both team and managerial levels[117][118]. Strategic Focus and Growth - The company aims to drive growth by evolving its Work OS platform and regularly releasing new building blocks and updates for performance and scale[37]. - The company emphasizes growing its mid-market customer base while investing in up-market growth strategies[99]. - The self-serve funnel will be scaled alongside a sales-led strategy, with full implementation expected in 2025[43]. - The company is focused on expanding its partner ecosystem to deepen product adoption and scale[42]. - The sales strategy includes increasing geographical footprint and face-to-face interactions to boost customer engagement and adoption[108]. Corporate Social Responsibility and Culture - The company has launched a philanthropic initiative, the monday.com Foundation, to support communities through technology and financial resources[151]. - The Tech School program, initiated in 2023, aims to empower youth from underserved communities with tech skills to close the digital gap[155]. - The company emphasizes a culture of inclusivity and diversity, with nine Employee Resource Groups (ERGs) aimed at enhancing employee engagement and development[140][141]. Intellectual Property and Workforce - As of December 31, 2024, the company holds 106 granted U.S. patents and has 31 U.S. patent-pending applications, indicating a strong focus on intellectual property[122]. - The workforce consists of 2,508 employees globally, with the largest regional presence in Israel (1,494 employees) and a significant number in the Americas (625 employees)[138][139]. Risks and Challenges - The company is subject to various risks, including foreign currency exchange rate fluctuations and competition in the software market[24].

Core Viewpoint - Monday.com (MNDY) has experienced a significant decline in stock performance, returning -28.6% over the past month, compared to the S&P 500's -7.3% and the Zacks Internet - Software industry's -17.8% [2] Earnings Estimate Revisions - The current quarter's earnings estimate for Monday.com is $0.68 per share, reflecting an increase of +11.5% year-over-year, with the consensus estimate remaining unchanged over the last 30 days [5] - The consensus earnings estimate for the current fiscal year is $3.33, indicating a year-over-year decline of -4.9%, with a significant change of -46.2% over the last month [5] - For the next fiscal year, the consensus earnings estimate is $4.31, showing a year-over-year increase of +29.4%, with a slight change of +2.4% over the past month [6] Revenue Growth Forecast - The consensus sales estimate for the current quarter is $277.66 million, indicating a year-over-year growth of +28% [9] - The sales estimates for the current and next fiscal years are $1.22 billion and $1.51 billion, respectively, reflecting changes of +25% and +24% [9] Last Reported Results and Surprise History - In the last reported quarter, Monday.com achieved revenues of $267.98 million, representing a year-over-year increase of +32.3%, with an EPS of $1.08 compared to $0.65 a year ago [10] - The reported revenues exceeded the Zacks Consensus Estimate of $261.14 million by +2.62%, and the EPS surprise was +38.46% [11] - The company has consistently beaten consensus EPS and revenue estimates in the trailing four quarters [11] Valuation - Monday.com is graded F on the Zacks Value Style Score, indicating it is trading at a premium compared to its peers [15] - Valuation multiples such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF) are essential for assessing whether the stock is overvalued, fairly valued, or undervalued [13][14] Conclusion - The Zacks Rank 3 suggests that Monday.com may perform in line with the broader market in the near term, despite the current market buzz [16]

Group 1: Meta Platforms - Meta Platforms has experienced a revenue growth of 22% in 2024, driven by advertisers targeting over 3.3 billion daily users [3] - The company is investing between $60 billion and $65 billion in capital expenditures for AI and other business needs this year [4] - Analysts project an annualized earnings growth rate of 18%, with the stock trading at a forward price-to-earnings ratio of 26, indicating potential for the share price to double in five years [7] Group 2: Monday.com - Monday.com shares have increased by 126% since 2022, capitalizing on the demand for automated work management solutions [8] - The company has seen a 22% annualized growth in customer count over the last five years, with revenue up 33% in 2024 [8] - The stock is trading between 9 and 18 times sales, and if it maintains a valuation around 10 times sales while growing revenue over 20% per year, shares could double by 2030 [11]

Core Viewpoint - monday.com (MNDY) reported strong financial results for the fourth quarter of 2024, with significant growth in earnings and revenues, indicating robust business performance and customer retention. Financial Performance - MNDY's non-GAAP earnings per share for Q4 2024 were $1.08, exceeding the Zacks Consensus Estimate by 38.46% and increasing 66.1% year-over-year [1] - The company's net revenues reached $268 million, a 32% year-over-year increase, and also surpassed the Zacks Consensus Estimate by 2.62% [2] Customer Metrics - In Q4 2024, MNDY had 1,207 customers with an annual run rate (ARR) of $100,000 or more, marking a 45% year-over-year increase [3] - The net dollar retention rate for these customers was 116%, indicating strong customer engagement and product adoption [4] - The total number of paid customers with more than 10 users rose to 59,214, a 10% increase from the previous year [3] Operating Expenses - MNDY's adjusted gross margin decreased by 100 basis points year-over-year to 89% [5] - Research and development expenses increased by 44.4% year-over-year to $48 million, representing 17.9% of revenues [5] - Sales and marketing expenses rose 16.2% year-over-year to $127.8 million, but as a percentage of revenues, they decreased by 660 basis points to 47.7% [5] Income and Cash Flow - The company reported a non-GAAP operating income of $40.3 million, up from $21.2 million in the same quarter last year [6] - As of December 31, 2024, MNDY had cash and equivalents totaling $1.41 billion, an increase from $1.34 billion as of September 30, 2024 [7] - Operating cash flow for the quarter was $76.7 million, down from $86.6 million in the previous quarter, while free cash flow was $72.7 million compared to $82.4 million previously [7] Guidance - For Q1 2025, MNDY expects revenues between $274 million and $276 million, with non-GAAP operating income projected between $25 million and $27 million [8] - For the full year 2025, the company anticipates revenues between $1,208 million and $1,221 million, with non-GAAP operating income expected in the range of $134 million to $142 million [8]

Group 1 - Michael Wiggins De Oliveira is an inflection investor, focusing on buying undervalued companies at pivotal moments when their business narratives are shifting towards increased profitability [1] - The investment strategy emphasizes technology and the Great Energy Transition, including uranium, with a concentrated portfolio of approximately 15 to 20 stocks and an average holding period of 18 months [1] - Michael has over 10 years of experience in analyzing companies, particularly in the tech and energy sectors, and has built a following of over 40,000 on Seeking Alpha [2] Group 2 - Michael leads the investing group Deep Value Returns, which offers insights through a concentrated portfolio of value stocks, timely updates on stock picks, and a weekly webinar for live advice [2] - The Deep Value Returns group provides support for both new and experienced investors, fostering an active and vibrant community accessible via chat [2]