Company Reports

We are discontinuing analyst coverage of Monday.com.

Monday.com reported third-quarter results with revenue increasing 26% year over year to $317 million. Despite achieving growth above guidance, management's fourth-quarter outlook of 23% annual sales growth was slightly below FactSet consensus estimates sending shares down 16% on Nov. 10.

Monday.com seeks to operate as the unified backbone of an organization through its flexible and broad WorkOS platform. The company’s strategy should continue to center on expanding within its enterprise customer base and broadening penetration across newer vertical solutions. Penetration within enterprise accounts remains relatively low, giving the company substantial room for growth and higher retention through deeper product adoption. Additionally, Monday’s horizontal platform approach positions it to compete not only against traditional work management peers but also entrenched incumbents in adjacent categories, expanding its total addressable market. While scaling these newer verticals will take time, we believe the opportunity is significant and should enhance customer stickiness, drive upsell potential, and support durable long-term growth.

We are transferring coverage of Monday.com, a cloud-based work management platform seeking to enhance collaboration and visibility across an organization. The company allows customers to organize projects, create rule-based workflows, and monitor progress against stated objectives.

Monday.com seeks to operate as the unified backbone of an organization through its flexible and broad WorkOS platform. The company’s strategy should continue to center on expanding within its enterprise customer base and broadening penetration across newer vertical solutions. Penetration within enterprise accounts remains relatively low, giving the company substantial room for growth and higher retention through deeper product adoption. Additionally, Monday’s horizontal platform approach positions it to compete not only against traditional work management peers but also entrenched incumbents in adjacent categories, expanding its total addressable market. While scaling these newer verticals will take time, we believe the opportunity is significant and should enhance customer stickiness, drive upsell potential, and support durable long-term growth.

Monday.com reported second-quarter revenue of $299 million, up 27% year over year, because of continued momentum upmarket and increased purchasing of additional products. Non-GAAP operating margin dropped 120 basis points year over year because of higher R&D expenses.

Monday is a leading provider of work management software. This emerging niche within software as a service, or SaaS, aims to improve the efficiency and productivity of project and process management by displacing widely deployed but suboptimal incumbent tools of email and spreadsheets. Monday’s solution allows customers to digitize business processes and to plan, capture, manage, automate, templatize, and report on custom workflows around a single source of truth. We believe work management tools offer superior functionality relative to incumbent solutions including centralized dashboards providing real time visibility, accountability, and consistency across complex, cross-functional projects, automating workflows, and dynamically assigning tasks.

No-moat Monday.com reported solid first-quarter results that exceeded both our expectations and management’s guidance. Growth was driven by increased product adoption, enduring artificial intelligence interest, and further gains in the enterprise customer base. Despite ongoing macroeconomic challenges, the company's go-to-market execution and multiproduct approach remain key to maintaining momentum.

Monday is a leading provider of work management software. This emerging niche within software as a service, or SaaS, aims to improve the efficiency and productivity of project and process management by displacing widely deployed but suboptimal incumbent tools of email and spreadsheets. Monday’s solution allows customers to digitize business processes and to plan, capture, manage, automate, templatize, and report on custom workflows around a single source of truth. We believe work management tools offer superior functionality relative to incumbent solutions including centralized dashboards providing real time visibility, accountability, and consistency across complex, cross-functional projects, automating workflows, and dynamically assigning tasks.

Monday is a leading provider of work management software. This emerging niche within software as a service, or SaaS, aims to improve the efficiency and productivity of project and process management by displacing widely deployed but suboptimal incumbent tools of email and spreadsheets. Monday’s solution allows customers to digitize business processes and to plan, capture, manage, automate, templatize, and report on custom workflows around a single source of truth. We believe work management tools offer superior functionality relative to incumbent solutions including centralized dashboards providing real time visibility, accountability, and consistency across complex, cross-functional projects, automating workflows, and dynamically assigning tasks.

No-moat Monday.com reported robust fourth-quarter earnings results that beat our estimates and consensus. The launch of the firm’s new artificial intelligence-enabled enterprise service management agent, along with solid retention metrics and enterprise customer gains, sent the stock soaring 30% after the release. We have updated our long-term estimates to better reflect demand for the firm’s AI solutions and increased cross-selling opportunities, causing us to raise our fair value estimate to $332 per share from $240.

We raise our fair value estimate for no-moat Monday.com to $240 from $230 per share following the release of strong third-quarter results that surpassed our above-guidance revenue and profitability estimates. Despite strong results, shares declined 15% during the day. We believe this is largely valuation-driven, as shares were trading at a 40% premium to our fair value heading into earnings, implying market expectations above even the company's solid results. Even after raising our fair value estimate and after the decline in the share price, we still view shares as moderately overvalued, at roughly a 15% premium to our updated fair value estimate.

Monday is a leading provider of work management software. This emerging niche within software as a service, or SaaS, aims to improve the efficiency and productivity of project and process management by displacing widely deployed but suboptimal incumbent tools of email and spreadsheets. Monday’s solution allows customers to digitize business processes and to plan, capture, manage, automate, templatize, and report on custom workflows around a single source of truth. We believe work management tools offer superior functionality relative to incumbent solutions including centralized dashboards providing real time visibility, accountability, and consistency across complex, cross-functional projects, automating workflows, and dynamically assigning tasks.

We raise our fair value estimate for no-moat Monday.com to $230 per share, from $220, following the release of strong second-quarter results that surpassed our above-guidance revenue and profitability forecasts. Monday continues to execute well on a land and expand strategy, with robust net and gross retention, together indicating healthy demand for the nascent work management software niche. After an impressive first-half performance, we have raised our long-term revenue per customer assumptions and assume more rapid profitability improvement on scale-based operating leverage and internal efficiencies. At the time of writing, Monday shares rallied 12% in intraday trading Aug. 12 but continue to screen as fairly valued on a risk-adjusted basis.

Monday is a leading provider of work management software. The emerging niche within software as a service, or SaaS, aims to improve the efficiency and productivity of project and process management by displacing widely deployed but suboptimal incumbent tools of email and spreadsheets. Monday’s solution allows customers to digitize business processes and to plan, capture, manage, automate, templatize, and report on custom workflows around a single source of truth. We believe work management tools offer superior functionality relative to incumbent solutions including centralized dashboards providing real time visibility, accountability, and consistency across complex, cross-functional projects, automating workflows, and dynamically assigning tasks.

We raised our fair value estimate for no-moat Monday.com to $220 per share from $200 following the release of strong first-quarter fiscal 2024 results, which surpassed our above-guidance revenue and profitability expectations. The robust results reflect promising demand for the nascent work management software niche and illustrate the value add of Monday’s offering. On reassessing the firm’s outlook, we now factor in higher revenue per customer growth on improved pricing, a shift upmarket, greater product attach, as well as more rapid scale-based operating leverage. Monday shares spiked a sharp 20% post the strong release but continue to screen as fairly valued on a risk adjusted basis relative to our updated valuation.

Monday is a leading provider of work management software. The emerging niche within software as a service, or SaaS, aims to improve the efficiency and productivity of project and process management by displacing widely deployed but suboptimal incumbent tools of email and spreadsheets. Monday’s solution allows customers to digitize business processes and to plan, capture, manage, automate, templatize, and report on custom workflows around a single source of truth. We believe work management tools offer superior functionality relative to incumbent solutions including centralized dashboards providing real time visibility, accountability, and consistency across complex, cross-functional projects, automating workflows, and dynamically assigning tasks.

We launch coverage of work management software provider Monday.com with a $200 fair value estimate and a no-moat rating. Work management software is an emerging niche within SaaS, which aims to improve the efficiency and productivity of project and process management by displacing widely deployed but suboptimal incumbent tools of email and spreadsheets. On a risk-adjusted basis, Monday's shares currently screen as fairly valued relative to our valuation, and we prefer moatier competitor Smartsheet, which currently trades in 4-star territory.

Monday is a leading provider of work management software. The emerging niche within software as a service, or SaaS, aims to improve the efficiency and productivity of project and process management by displacing widely deployed but suboptimal incumbent tools of email and spreadsheets. Monday’s solution allows customers to digitize business processes and to plan, capture, manage, automate, templatize, and report on custom workflows around a single source of truth. We believe work management tools offer superior functionality relative to incumbent solutions including centralized dashboards providing real time visibility, accountability, and consistency across complex, cross-functional projects, automating workflows, and dynamically assigning tasks.