Monday.com (MNDY Quick QuoteMNDY - Free Report)  is a business software company ripping off impressive earnings and revenue growth. MNDY stock has doubled the Zacks Tech sector over the past two years, soaring 190%.

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Monday.com posted a strong beat-and-raised third quarter on November 11 helping earn its Zacks Rank #1 (Strong Buy). Still, MNDY stock trades roughly 25% below its all-time highs even as the Nasdaq and plenty of big tech stocks appear a bit overheated in the near term.

Why MNDY is a Great Growth Tech Stock

The foundation of Monday.com’s business is its work-focused operating system. Monday.com’s Work OS is a “low code-no code” platform that helps businesses build work management tools and software applications across various industries.

Monday.com operates in a critical growth segment since companies and startups of all stripes must digitalize their workflows to thrive in the modern economy.

Monday.com has accumulated over 225K customers across 200 industries in over 200 countries. The company boasts an impressive net dollar retention rate of 111% (in Q3), showcasing its ability to retain its existing revenue from current customers when factoring in upgrades, downgrades, and churn.

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Monday.com is growing its reach with larger customers though it is still built on the back of smaller businesses. MNDY grew its paid customers with over $100K in Annual Recurring Revenue by 44% in the third quarter.

The company highlighted that its “second-largest customer - an international technology company - more than doubled their seat count to 60,000 from 25,000.”

Monday.com grew its third-quarter revenue by 33% to $251 million while surpassing $1 billion in ARR during the period. MNDY also expanded its adjusted Q3 EPS by 33% after it swung from a full-year loss of -$0.73 in 2022 to +$1.85 per share in 2023.

Monday.com Stock’s Impressive Growth Outlook

The business software firm’s FY24 consensus earnings estimate has jumped 16% since its November 11 release with its FY25 estimate 13% higher. MNDY’s recent upbeat EPS outlook helps it land a Zacks Rank #1 (Strong Buy) and is part of an impressive surge in bottom-line revisions.

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Monday.com is expected to expand its adjusted earnings by 73% in FY24 and 12% next year. MNDY has topped our EPS estimates by an average of 72% in the trailing four quarters.

MNDY is projected to grow its revenue by 32% in 2024 and 26% in 2025 to reach $1.21 billion vs. $729.7 million in 2023. This expansion comes on top of FY23’s 41% growth and 2022’s 68% surge.

MNDY Stock Performance and Technical Levels

Monday.com stock ripped off a 190% gain in the last two years to blow away the Zacks Tech sector’s 82%. The stock is up 53% YTD to double Tech. Monday.com has roughly matched the Zacks Tech sector since its June 2021 IPO, up around 40%.

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Despite all of this, MDNY stock is trading around 25% below its 2021 peaks and 17% below its average Zacks price target. The stock popped on Friday to retake its 50-day and 21-day moving averages. The stock is also far from overheated, trading at neutral RSI levels.

Time to Buy Monday.com Stock Down 25% from Its Highs?

Monday.com’s valuation levels are worrisome and holding the stock back. But the company is improving its bottom line and remains committed to growth.

Monday.com’s balance sheet is stellar, with $1.4 billion in cash and equivalents and $1.6 billion in total assets compared to only $614 million in total liabilities. This should help MNDY pursue expansion efforts and possibly boost its artificial intelligence (AI) investments.

Wall Street is bullish on the stock, with 16 of the 22 brokerage recommendations Zacks has coming in at “Strong Buy,” with no sells.