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Monday.com (MNDY) Stock Sinks As Market Gains: Here's Why

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In the latest close session, Monday.com (MNDY - Free Report) was down 3.27% at $211.99. This move lagged the S&P 500's daily gain of 0.44%. Meanwhile, the Dow experienced a rise of 0.14%, and the technology-dominated Nasdaq saw an increase of 0.7%.

Coming into today, shares of the project management software developer had gained 23.19% in the past month. In that same time, the Computer and Technology sector gained 9.59%, while the S&P 500 gained 4.03%.

The investment community will be paying close attention to the earnings performance of Monday.com in its upcoming release. It is anticipated that the company will report an EPS of $0.89, marking a 4.71% rise compared to the same quarter of the previous year. Meanwhile, our latest consensus estimate is calling for revenue of $312.06 million, up 24.33% from the prior-year quarter.

For the full year, the Zacks Consensus Estimates are projecting earnings of $3.97 per share and revenue of $1.23 billion, which would represent changes of +13.43% and +26.09%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for Mondaycom. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has remained unchanged. Monday.com is holding a Zacks Rank of #5 (Strong Sell) right now.

Digging into valuation, Monday.com currently has a Forward P/E ratio of 55.14. For comparison, its industry has an average Forward P/E of 32.15, which means Monday.com is trading at a premium to the group.

It is also worth noting that MNDY currently has a PEG ratio of 2. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The average PEG ratio for the Internet - Software industry stood at 2.34 at the close of the market yesterday.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 71, putting it in the top 29% of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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