Monday.com Issues Weak Guidance Amid AI Disruption Concerns
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2h ago
0mins
Should l Buy MNDY?
Source: Newsfilter
- Weak Financial Guidance: Monday.com forecasts revenue between $338 million and $340 million for the current quarter, falling short of the $343 million expected by analysts, indicating significant challenges amid rising AI tool pressures that could undermine investor confidence.
- Stock Price Plunge: The company's stock plummeted over 19% on Monday following the weak guidance, reflecting market concerns about the software sector's vulnerability to AI disruption, with Monday.com shares losing half their value this year.
- Market Uncertainty: Although management claims no current impact from AI companies, they anticipate ongoing market volatility due to near-term margin pressures from foreign exchange rates, which may affect the company's long-term strategy and investor sentiment.
- New Feature Development: During the earnings call, management highlighted the implementation of new AI capabilities, such as agents and a vibe feature, aimed at improving conversion rates and user engagement, demonstrating the company's adaptability and innovative intent in the face of competitive pressures.
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Analyst Views on MNDY
Wall Street analysts forecast MNDY stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for MNDY is 235.58 USD with a low forecast of 195.00 USD and a high forecast of 310.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
20 Analyst Rating
18 Buy
2 Hold
0 Sell
Strong Buy
Current: 98.000
Low
195.00
Averages
235.58
High
310.00
Current: 98.000
Low
195.00
Averages
235.58
High
310.00
About MNDY
Monday.Com Ltd is an Israel-based company engaged primarily in the software sector. The Company provides cloud-based platform that enables its users to create custom applications and project management software. The platform offers a Work Operating System (Work OS) that provides modular building blocks to create software applications and work management tools. This system is designed to enhance team collaboration and streamline workflows across various business functions, including project management, CRM, marketing, and more. The Company has teams in Tel Aviv, New York, San Francisco, Miami, Chicago, London, Kiev, and Sydney. The Company customize its platform to suit any business vertical and serves customers worldwide.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Earnings vs. Outlook: Despite surpassing earnings expectations, the company's disappointing forecast for 2026 negatively impacted investor sentiment.
See More
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Stock Performance: Monday.com’s stock experienced a significant decline following the release of its quarterly earnings report.
Earnings Report: The company reported better-than-expected earnings for the quarter, indicating strong current performance.
Future Outlook: Despite the positive earnings, Monday.com provided a disappointing outlook for 2026, which contributed to the stock's drop.
Market Reaction: Investors reacted negatively to the outlook, leading to a plunge in the company's stock price.
See More
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- Strong Earnings Report: Monday.com reported a 25% year-over-year revenue increase in Q4, reaching $333.9 million, surpassing market expectations of $329.7 million, indicating robust performance in the CRM and project management software sectors.
- Record Customer Growth: The company achieved record net additions of customers with over $100,000 in annual recurring revenue, and its AI-powered Monday Vibe tool became the fastest product in history to reach $1 million in ARR, showcasing strong demand for AI-driven solutions.
- Disappointing Guidance: Despite a solid Q4, Monday.com provided disappointing guidance for Q1, projecting revenue growth to slow to 20%, with estimates of $338 million to $340 million, below the consensus of $342.9 million, reflecting challenges in acquiring lower-end customers.
- Negative Market Reaction: Following the guidance announcement, Monday.com’s stock fell 22.4% on the day and has dropped 70% over the past year, highlighting investor concerns about potential disruptions to its business model from AI competition.
See More
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- Market Recovery: The S&P 500 Index rose by 0.46%, the Dow Jones Industrial Average increased by 0.09%, and the Nasdaq 100 climbed by 0.61%, indicating a rebound in the market driven by recovering tech and chipmaker stocks, reflecting investor confidence in economic growth.
- Mining Stocks Surge: Gold prices increased by over 1% and silver prices jumped more than 6%, boosting mining stocks with Coeur Mining up over 6% and Freeport McMoRan up more than 5%, suggesting rising investor demand for precious metals amid inflation concerns.
- Positive Earnings Outlook: Over 79% of S&P 500 companies that reported earnings exceeded expectations, with Q4 earnings growth projected at 8.4%, marking the tenth consecutive quarter of year-over-year growth, indicating sustained corporate profitability that could further drive stock market gains.
- Economic Data Focus: The market is closely watching upcoming employment and inflation data, with January nonfarm payrolls expected to rise by 69,000 and the unemployment rate to remain at 4.4%, as these figures will influence investor expectations regarding future monetary policy, potentially leading to market volatility.
See More
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- Tech Stock Retreat: Technology stocks are broadly down today, contributing to a 0.03% decline in the S&P 500, a 0.34% drop in the Dow Jones, and a 0.17% decrease in the Nasdaq 100, reflecting a cautious investor sentiment following last Friday's sharp gains.
- Bond Yield Pressure: Rising US bond yields, with the 10-year T-note yield up 2 basis points to 4.22%, are exacerbated by Chinese regulators instructing banks to reduce their US debt holdings, reviving concerns over the haven status of US assets and potentially impacting investor confidence.
- Earnings Season Insights: More than half of S&P 500 companies have reported earnings, with 79% exceeding expectations, and Q4 earnings growth is projected at 8.4%, marking the tenth consecutive quarter of year-over-year growth, indicating resilience in corporate earnings and potential market support.
- Economic Data Focus: The market is set to focus on upcoming economic data, including a projected 0.8% increase in the employment cost index on Tuesday and a 2.5% year-over-year rise in the consumer price index on Friday, which will provide guidance on future economic trends.
See More
High-Volume Earnings Reports This Week from Tech and Consumer Sectors
- Earnings Schedule: This week features a high volume of earnings reports from technology, consumer discretionary, and energy sectors, with RIVN stock showing notable movement ahead of its earnings release, indicating investor sentiment.
- Monday.com and Pagaya Reports: On Monday, work management SaaS provider Monday.com and fintech company Pagaya released their earnings before the market opened, with expectations that their results will reflect broader industry trends.
- Coinbase Earnings Expectations: On Thursday, Coinbase is expected to report earnings of 68 cents per share and quarterly revenue of $1.86 billion, despite facing a projected 33% drop in transaction revenue, raising investor interest in its growing stablecoin and subscription services.
- Nebius Group Forecast: Also on Thursday, Nebius Group is projected to report a loss of $1.14 per share and revenue of $246.05 million, with analysts expressing caution, reflecting concerns over cloud service demand in the current market environment.
See More
