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monday.com Ltd. (MNDY) Hits Fresh High: Is There Still Room to Run?
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Have you been paying attention to shares of Monday.com (MNDY - Free Report) ? Shares have been on the move with the stock up 23.7% over the past month. The stock hit a new 52-week high of $239.22 in the previous session. Monday.com has gained 25.6% since the start of the year compared to the 10.4% move for the Zacks Computer and Technology sector and the 18.9% return for the Zacks Internet - Software industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on February 12, 2024, Monday.com reported EPS of $0.65 versus consensus estimate of $0.3 while it beat the consensus revenue estimate by 2.16%.
For the current fiscal year, Monday.com is expected to post earnings of $1.73 per share on $725.44 million in revenues. Meanwhile, for the next fiscal year, the company is expected to earn $2.21 per share on $929.37 million in revenues. This represents a year-over-year change of 15.82% and 28.11%, respectively.
Valuation Metrics
Monday.com may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Monday.com has a Value Score of D. The stock's Growth and Momentum Scores are A and F, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 136.5X current fiscal year EPS estimates, which is a premium to the peer industry average of 33X. On a trailing cash flow basis, the stock currently trades at 5X versus its peer group's average of 18.3X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Monday.com currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Monday.com meets the list of requirements. Thus, it seems as though Monday.com shares could still be poised for more gains ahead.
How Does MNDY Stack Up to the Competition?
Shares of MNDY have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is F5, Inc. (FFIV - Free Report) . FFIV has a Zacks Rank of # 2 (Buy) and a Value Score of C, a Growth Score of A, and a Momentum Score of B.
Earnings were strong last quarter. F5, Inc. beat our consensus estimate by 13.20%, and for the current fiscal year, FFIV is expected to post earnings of $12.58 per share on revenue of $2.78 billion.
Shares of F5, Inc. have gained 5.9% over the past month, and currently trade at a forward P/E of 14.83X and a P/CF of 17.76X.
The Internet - Software industry is in the top 31% of all the industries we have in our universe, so it looks like there are some nice tailwinds for MNDY and FFIV, even beyond their own solid fundamental situation.
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monday.com Ltd. (MNDY) Hits Fresh High: Is There Still Room to Run?
Have you been paying attention to shares of Monday.com (MNDY - Free Report) ? Shares have been on the move with the stock up 23.7% over the past month. The stock hit a new 52-week high of $239.22 in the previous session. Monday.com has gained 25.6% since the start of the year compared to the 10.4% move for the Zacks Computer and Technology sector and the 18.9% return for the Zacks Internet - Software industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on February 12, 2024, Monday.com reported EPS of $0.65 versus consensus estimate of $0.3 while it beat the consensus revenue estimate by 2.16%.
For the current fiscal year, Monday.com is expected to post earnings of $1.73 per share on $725.44 million in revenues. Meanwhile, for the next fiscal year, the company is expected to earn $2.21 per share on $929.37 million in revenues. This represents a year-over-year change of 15.82% and 28.11%, respectively.
Valuation Metrics
Monday.com may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Monday.com has a Value Score of D. The stock's Growth and Momentum Scores are A and F, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 136.5X current fiscal year EPS estimates, which is a premium to the peer industry average of 33X. On a trailing cash flow basis, the stock currently trades at 5X versus its peer group's average of 18.3X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Monday.com currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Monday.com meets the list of requirements. Thus, it seems as though Monday.com shares could still be poised for more gains ahead.
How Does MNDY Stack Up to the Competition?
Shares of MNDY have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is F5, Inc. (FFIV - Free Report) . FFIV has a Zacks Rank of # 2 (Buy) and a Value Score of C, a Growth Score of A, and a Momentum Score of B.
Earnings were strong last quarter. F5, Inc. beat our consensus estimate by 13.20%, and for the current fiscal year, FFIV is expected to post earnings of $12.58 per share on revenue of $2.78 billion.
Shares of F5, Inc. have gained 5.9% over the past month, and currently trade at a forward P/E of 14.83X and a P/CF of 17.76X.
The Internet - Software industry is in the top 31% of all the industries we have in our universe, so it looks like there are some nice tailwinds for MNDY and FFIV, even beyond their own solid fundamental situation.