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Monday.com (MNDY)
NASDAQ:MNDY
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Monday.com
(NASDAQ:MNDY)
72Outperform
Positive Factors
Growth Strategy
The addition of a CRO will strategically position Monday well to drive this next leg of growth, especially as it looks to move upmarket.
Leadership
Casey George's extensive background in go-to-market and prior leadership roles in businesses with larger deal sizes make him well equipped to take on the position at Monday.com.
Negative Factors
Financial Outlook
The FY25 free cash flow margin is guided to drop below previous estimates and last year's figures.
Leadership Uncertainty
The search for a new Chief Revenue Officer is still underway, which often carries the risk of sales disruption.
Monday.com (MNDY) vs. S&P 500 (SPY)
Market Cap
$12.79B
Dividend YieldN/A
Average Volume (3M)898.48K
Price to Earnings (P/E)416.6
Beta (1Y)2.31
Revenue Growth33.21%
EPS GrowthN/A
CountryUS
Employees2,508
SectorTechnology
Sector Strength40
IndustrySoftware - Application
Share Statistics
EPS (TTM)0.60
Shares Outstanding50,773,340
10 Day Avg. Volume995,524
30 Day Avg. Volume898,484
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)13.87
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$375.06Price Target Upside48.83% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering20
Monday.com Business Overview & Revenue Model
Company Descriptionmonday.com Ltd., together with its subsidiaries, develops software applications in the United States, Europe, the Middle East, Africa, and internationally. It provides Work OS, a cloud-based visual work operating system that consists of modular building blocks used and assembled to create software applications and work management tools. The company also offers product solutions for marketing, CRM, project management, software development, and other fields; and business development, presale, and customer success services. It serves organizations, educational or government institution, and distinct business unit of an organization. The company was formerly known as DaPulse Labs Ltd. and changed its name to monday.com Ltd. in November 2017. monday.com Ltd. was incorporated in 2012 and is headquartered in Tel Aviv-Yafo, Israel.
How the Company Makes MoneyMonday.com generates revenue primarily through a subscription-based model. The company offers tiered pricing plans, including Basic, Standard, Pro, and Enterprise options, catering to different sizes and types of organizations. Revenue is driven by the number of users and the level of service and features each customer selects. Additionally, Monday.com benefits from upselling opportunities as customers expand their usage and require more advanced features. Significant partnerships with other technology providers, integrations with third-party applications, and a developer ecosystem that extends the platform's functionality also contribute to its earnings.
Monday.com Financial Statement Overview
Summary
Monday.com exhibits strong growth momentum with impressive revenue and cash flow expansion. Despite challenges at the operating profit level, net income has turned positive, marking a crucial turnaround. The balance sheet reflects robust liquidity and low leverage, providing a solid foundation for future growth.Income Statement
Monday.com has shown robust revenue growth with a significant increase from $161.12 million in 2020 to $971.99 million in 2024, indicating strong market demand for its software solutions. The gross profit margin remains high at approximately 89.33% in 2024, reflecting efficient cost management in delivering services. However, the company has struggled with profitability at the operating level, as evidenced by negative EBIT and EBITDA margins, although there's an improvement in net income with a margin of 3.33% in 2024.85
Very Positive
Balance Sheet
The balance sheet of Monday.com demonstrates a strong liquidity position with cash and equivalents surpassing total debt, leading to a negative net debt situation. The debt-to-equity ratio is low due to minimal debt levels relative to equity, signaling financial stability. However, the equity ratio has room for improvement as it stands at 61.11% in 2024, suggesting potential for better asset utilization. The growth in stockholders' equity over the years is a positive indicator of financial health.78
Positive
Cash Flow
Cash flow from operations has consistently increased, reaching $311.07 million in 2024, indicating strong cash-generating capabilities. The free cash flow has also grown significantly, enhancing financial flexibility. The free cash flow to net income ratio suggests efficient cash conversion, with free cash exceeding net income. However, the volatility in investing and financing cash flows requires attention to ensure sustainable cash management practices.82
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 972.00M | 729.70M | 519.03M | 308.15M | 161.12M | Gross Profit |
| 868.30M | 649.05M | 452.50M | 269.14M | 138.63M | EBIT |
| -21.03M | -38.59M | -152.01M | -126.13M | -150.54M | EBITDA |
| -9.18M | 12.79M | -120.10M | -123.93M | -147.11M | Net Income Common Stockholders |
| 32.37M | -1.88M | -136.87M | -129.29M | -152.20M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.46B | 1.12B | 885.89M | 886.81M | 139.81M | Total Assets |
| 1.69B | 1.28B | 1.04B | 933.19M | 157.42M | Total Debt |
| 106.04M | 61.15M | 77.72M | 84.00K | 21.10M | Net Debt |
| -1.31B | -1.05B | -808.17M | -886.73M | -108.71M | Total Liabilities |
| 655.28M | 462.15M | 359.30M | 229.80M | 374.98M | Stockholders Equity |
| 1.03B | 813.51M | 679.74M | 703.39M | -217.56M |
| Cash Flow | Free Cash Flow | |||
| 297.85M | 204.94M | 8.14M | 2.60M | -42.66M | Operating Cash Flow |
| 311.06M | 215.40M | 27.14M | 16.36M | -37.17M | Investing Cash Flow |
| -70.81M | -10.46M | -19.00M | -3.63M | -11.48M | Financing Cash Flow |
| 55.21M | 25.29M | -9.05M | 742.27M | 8.47M |
Monday.com Technical Analysis
Negative
252.00
Price Trends
269.76
Negative
262.59
Negative
261.37
Negative
Market Momentum
-4.80
Positive
48.96
Neutral
31.06
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MNDY, the sentiment is Negative. The current price of 252 is below the 20-day moving average (MA) of 252.54, below the 50-day MA of 269.76, and below the 200-day MA of 261.37, indicating a bearish trend. The MACD of -4.80 indicates Positive momentum. The RSI at 48.96 is Neutral, neither overbought nor oversold. The STOCH value of 31.06 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MNDY.
Monday.com Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $12.78B | 58.23 | 24.39% | 0.59% | 10.15% | -28.62% | |
75 Outperform | $10.49B | 48.20 | 20.49% | ― | 15.96% | 31.76% | |
72 Outperform | $12.79B | 416.60 | 3.51% | ― | 33.21% | ― | |
65 Neutral | $15.26B | 182.67 | 11.97% | ― | 40.84% | 437.52% | |
58 Neutral | $3.79B | ― | -92.26% | ― | 10.94% | 4.54% | |
57 Neutral | $20.24B | 9.51 | -13.28% | 2.72% | 5.43% | -24.54% | |
53 Neutral | $8.19B | ― | -20.84% | ― | -17.10% | 21.82% |
* Technology Sector Average
Performance Comparison
MNDY
Monday.com
243.65
50.54
26.17%
PCTY
Paylocity
183.78
15.71
9.35%
U
Unity Software
19.08
-6.23
-24.61%
BSY
Bentley Systems
41.60
-6.32
-13.19%
ASAN
Asana
15.48
1.03
7.13%
DUOL
Duolingo
316.94
105.90
50.18%
Monday.com Earnings Call Summary
Earnings Call Date: Feb 10, 2025 | % Change Since: -2.42% | Next Earnings Date: May 19, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong overall performance for monday.com in FY 2024, with significant achievements in revenue growth, market expansion, and AI integration. Despite challenges such as FX impact and increased R&D expenses, the company maintains a positive outlook for 2025.Highlights
Achievement of $1 Billion in Annual Recurring Revenue
monday.com reached a significant milestone by surpassing $1 billion in annual recurring revenue, demonstrating the strong demand for their WorkOS platform.
Record Operating Margins and Free Cash Flow
The company achieved record operating margins and delivered record free cash flow, with a free cash flow margin of 30% for FY 2024.
Revenue Growth
Total revenue in Q4 was $268 million, up 32% year-over-year. FY 2024 revenue reached $972 million, marking a 33% increase from the prior year.
Recognition in Gartner Magic Quadrant
monday.com was recognized as a leader in three categories in the Gartner Magic Quadrant, validating their strategy and commitment to delivering value.
AI Integration and Usage
Since integrating AI into their platform, users performed approximately 70 million AI actions, highlighting their commitment to enhancing user experience and efficiency.
Expansion into Enterprise Market
Successfully expanded into the enterprise market with the largest seat count growing to 80,000 seats, indicating strong enterprise customer engagement.
Strong Product Performance
Monday's CRM exceeded expectations, and there was a record number of net new accounts for both CRM and dev during the year.
Lowlights
FX Impact on 2025 Forecast
The FY 2025 forecast assumes a negative impact from foreign exchange (FX) of 100 to 200 basis points.
Increased R&D Expenses
Research and development expenses increased to $48.1 million in Q4 or 18% of revenue, up from 16% in the year-ago quarter.
Challenging Economic Environment
Acknowledged the unpredictable geopolitical situation and economic headwinds, contributing to a cautious outlook.
Company Guidance
During the monday.com fourth-quarter fiscal year 2024 earnings call held on February 10, 2025, several key financial metrics and areas of strategic focus were discussed. The company achieved a milestone of $1 billion in annual recurring revenue, with total revenue for Q4 at $268 million, marking a 32% year-over-year increase, and fiscal year 2024 revenue at $972 million, up 33% from the prior year. Operational efficiency was highlighted by record operating margins and free cash flow of $72.7 million in Q4. The company also emphasized its growth in enterprise markets, with its largest seat count reaching 80,000 seats. Net dollar retention (NDR) rose to 112% in Q4, and the company expects this to remain stable through 2025. The financial guidance for fiscal year 2025 forecasts revenue between $1.208 billion and $1.221 billion, reflecting 24% to 26% growth, with a free cash flow target of $300 million to $308 million. The strategic focus for 2025 includes enhancing AI capabilities, expanding product lines, and increasing headcount by approximately 30%, primarily in sales, R&D, and product teams.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.