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Monday.com (MNDY - Free Report) is a Zacks Rank #1 (Strong Buy) that develops software applications in the United States, Europe, the Middle East, Africa, and internationally. The company provides an open platform that democratizes the power of software so organizations can easily build software applications and work management tools to fit their every need.
The stock is up 45% on the year, but it has been a roller coaster ride. Higher interest rates combined with a lofty valuation have created a lot of volatility for the name.
After hitting 2023 highs back in July, the stock started to sell off. And when the Israel-Hamas conflict broke out, the stock sold off another 15%.
Despite these headwinds, the company has performed. A recent earnings report brought a fresh round of buying and the stock is trading just below its 2023 highs.
About the Company
Monday.com was incorporated in 2012 and is headquartered in Tel Aviv, Israel. The company employs over 1,600 people and has over 186,000 customers using monday.com.
The company serves organizations, educational or government institutions, and distinct business units of an organization.
The stock has a Zacks Style Score of “A” in Growth and Momentum. However, the company has a Forward PE of 121 and has a score of “F” in Value.
Q3 Earnings Beat and Raised Guidance
On November 13th, MNDY reported a 255% EPS beat and raised its Q4 revenue outlook. Paid enterprise customers were up 57% year over year.
The company now sees FY23 revenues at $723-725M v the expected $704M.
The company has never missed earnings since its IPO back in 2021. Management commented they are seeing continued momentum from their multi-product strategy and robust customer demand.
Investors responded positively to the quarter, taking the stock up by almost 11%.
Analyst Estimates
Since earnings, analysts have been taking the numbers higher and some are even raising price targets.
Looking at the current quarter, estimates are surging 64% higher over the last 30 days. For the next quarter, estimates have gone from $0.18 to $0.29 over that same time frame, or 61%.
Looking at the longer term, estimates are keeping pace, with big percentage moves higher.
For the current year, analysts have taken numbers from $0.91 to $1.48, or 63%. For next year, we see estimates go from $1.07 to $1.71, or 60%.
Since earnings, Citigroup reiterated their Buy rating and $194 target. TD Cowen reiterated their Outperform and $205 target. KeyBanc maintained its Overweight and raised its price target to $185 from $180.
The Technicals
The stock was a hot IPO in 2021, going from its offering price of $155 to $450. But as tech sold off in 2022, the stock was crushed, falling all the way to a low of $73.58.
After the recent earnings report, the stock is over 130% from those lows.
Those looking for an entry can target the 200-day MA at $155. However, that price might not come as a 161.8% Fibonacci extension at $212 is in play already for the bulls.
Bottom Line
When it comes down to valuation, monday.com investors see the company's earnings growth as strong enough to grow into the high PE.
When it comes down to the Israel exposure and risk, there was no disruption to services as the company initiated a hybrid work environment adjusting to the potential risk.
Despite these headwinds, the company produced a monster quarter and the stock is closing in on 2023 highs.
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Bull of the Day: Monday.com (MNDY)
Monday.com (MNDY - Free Report) is a Zacks Rank #1 (Strong Buy) that develops software applications in the United States, Europe, the Middle East, Africa, and internationally. The company provides an open platform that democratizes the power of software so organizations can easily build software applications and work management tools to fit their every need.
The stock is up 45% on the year, but it has been a roller coaster ride. Higher interest rates combined with a lofty valuation have created a lot of volatility for the name.
After hitting 2023 highs back in July, the stock started to sell off. And when the Israel-Hamas conflict broke out, the stock sold off another 15%.
Despite these headwinds, the company has performed. A recent earnings report brought a fresh round of buying and the stock is trading just below its 2023 highs.
About the Company
Monday.com was incorporated in 2012 and is headquartered in Tel Aviv, Israel. The company employs over 1,600 people and has over 186,000 customers using monday.com.
The company serves organizations, educational or government institutions, and distinct business units of an organization.
The stock has a Zacks Style Score of “A” in Growth and Momentum. However, the company has a Forward PE of 121 and has a score of “F” in Value.
Q3 Earnings Beat and Raised Guidance
On November 13th, MNDY reported a 255% EPS beat and raised its Q4 revenue outlook. Paid enterprise customers were up 57% year over year.
The company now sees FY23 revenues at $723-725M v the expected $704M.
The company has never missed earnings since its IPO back in 2021. Management commented they are seeing continued momentum from their multi-product strategy and robust customer demand.
Investors responded positively to the quarter, taking the stock up by almost 11%.
Analyst Estimates
Since earnings, analysts have been taking the numbers higher and some are even raising price targets.
Looking at the current quarter, estimates are surging 64% higher over the last 30 days. For the next quarter, estimates have gone from $0.18 to $0.29 over that same time frame, or 61%.
Looking at the longer term, estimates are keeping pace, with big percentage moves higher.
For the current year, analysts have taken numbers from $0.91 to $1.48, or 63%. For next year, we see estimates go from $1.07 to $1.71, or 60%.
Since earnings, Citigroup reiterated their Buy rating and $194 target. TD Cowen reiterated their Outperform and $205 target. KeyBanc maintained its Overweight and raised its price target to $185 from $180.
The Technicals
The stock was a hot IPO in 2021, going from its offering price of $155 to $450. But as tech sold off in 2022, the stock was crushed, falling all the way to a low of $73.58.
After the recent earnings report, the stock is over 130% from those lows.
Those looking for an entry can target the 200-day MA at $155. However, that price might not come as a 161.8% Fibonacci extension at $212 is in play already for the bulls.
Bottom Line
When it comes down to valuation, monday.com investors see the company's earnings growth as strong enough to grow into the high PE.
When it comes down to the Israel exposure and risk, there was no disruption to services as the company initiated a hybrid work environment adjusting to the potential risk.
Despite these headwinds, the company produced a monster quarter and the stock is closing in on 2023 highs.