Why Monday.com Stock Lost 37% in February

Core Viewpoint - Software stocks, particularly in the SaaS sector, faced significant declines due to concerns that AI could disrupt traditional software products, with Monday.com being notably affected [1][2]. Company Performance - Monday.com experienced a 36.7% drop in stock price over the month, primarily due to negative sentiment surrounding AI and disappointing fourth-quarter earnings [2][4]. - The company reported a revenue increase of 25% to $333.9 million, surpassing the consensus estimate of $329.7 million [5]. - Despite beating earnings estimates with an adjusted EPS of $1.04, down from $1.08, investor confidence was shaken by the company's guidance and signs of slowing growth among smaller customers [6]. Future Outlook - For 2026, Monday.com anticipates revenue growth of 18%-19%, projecting revenues between $1.452 billion and $1.462 billion, which is below the market estimate of $1.48 billion [8]. - The first-quarter revenue guidance of $338 million to $340 million also fell short of consensus expectations [8]. - The company's valuation has decreased significantly, and a recovery in stock price may depend on demonstrating meaningful growth in GAAP profits [9].