Why Shares of Monday.com Stock Sank This Week

Core Insights - Investors expressed disappointment with Monday.com's recent quarterly earnings, leading to a nearly 30% drop in its stock price this week [1] - The company reported a revenue growth of 27% year over year, totaling $299 million, but this represents a slowdown compared to previous quarters [2] - The number of customers spending over $100,000 annually increased by 46% year over year, reaching 1,472, indicating strong demand from larger businesses [3] - The stock decline is attributed to slowing revenue growth and an operating loss of $11.6 million due to high stock-based compensation [4] - Monday.com currently trades at a low price-to-sales ratio of 8.4, with gross margins of 90%, suggesting potential for future profitability [7] - Assuming a net income margin of 30% at scale, the projected annual net income could be $330 million, leading to a price-to-earnings ratio of 27, which is considered reasonable for a high-growth company [8] - The current market conditions may present a buying opportunity for investors who believe in Monday.com's growth potential [9]