This Software Stock Is Down 35% but Here's Why It Just Became a $4 Million Bet

Core Insights - Montreal-based Formula Growth disclosed a new position in monday.com, acquiring 20,000 shares valued at nearly $3.9 million during the third quarter [2][3][6] - The new stake in monday.com represents 1.4% of Formula Growth's reportable assets under management (AUM) [4][10] - As of the latest report, monday.com shares are priced at $147.08, reflecting a 35% decline over the past year, contrasting with the S&P 500's 16.5% increase during the same period [4] Company Overview - monday.com reported a total revenue of $1.2 billion and a net income of $65.1 million [5] - The company's market capitalization stands at $7.6 billion, with shares priced at $147.08 as of the latest report [5] - monday.com offers a cloud-based Work OS platform that supports work management, project coordination, CRM, and software development for a diverse range of organizations globally [8][9] Financial Performance - In the third quarter, monday.com achieved revenue of $316.9 million, marking a 26% year-over-year increase [11] - Non-GAAP operating income rose to $47.5 million, with operating margins expanding to 15% [11] - The company generated strong free cash flow of $92.3 million and ended the quarter with over $1.5 billion in cash [11] - Customer expansion is notable, with the number of customers spending over $100,000 annually increasing by nearly 50% year over year [11] Investment Perspective - The new stake by Formula Growth indicates an early-stage interest in monday.com, suggesting potential for future growth despite current stock volatility [10][12] - The fundamentals of monday.com are improving, with strong cash generation and enterprise penetration, which may lead to a revaluation of the stock [12]