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On Monday , Goldman Sachs adjusted its outlook on monday.com Ltd. (NASDAQ:MNDY) shares, increasing the price target to $400 from the previous $350, while reiterating a Buy rating on the stock. The stock, currently trading near its 52-week high of $342.64, has shown remarkable momentum with a 28.5% gain in the past week alone. The upgrade follows the company’s strong performance in the fourth quarter of 2024, surpassing expectations on key financial metrics. According to InvestingPro data, analyst targets for the stock range from $240 to $455.
monday.com showed robust quarterly results, with a 32% year-over-year increase in revenue, outpacing the consensus estimate of 29%. The company maintains impressive gross profit margins of 89.46% and has achieved a revenue growth rate of 33.9% over the last twelve months. The company also reported an operating margin (OpM) of 15%, exceeding the 12% market consensus, and a free cash flow margin (FCFM) of 27%, higher than the anticipated 25%. These results have led to a 27% surge in the stock price as investors respond to the company’s favorable fiscal year 2025 guidance, which forecasts a 24-26% year-over-year revenue growth in USD.
The firm’s analysts believe that the initial guidance may be on the conservative side, considering it suggests a net new revenue profile similar to fiscal year 2024, despite several potential sources of revenue growth. These include the inflection in the small and medium-sized business (SMB) segment, cross-selling opportunities, customer expansion, new product offerings, and increased artificial intelligence (AI) utilization.
The report highlighted monday.com’s burgeoning AI usage, with approximately 10 million total AI actions recorded, a significant increase from previous quarters. The introduction of consumption-based pricing for AI Blocks is expected to drive further engagement and conversion from free to paid users. Additionally, the early adoption of Monday Service bolsters the company’s multi-product strategy.
monday.com also demonstrates strength in attracting high-value customers, with net dollar retention (NDR) for $100,000+ customers rising to 116% and a record number of new adds in this segment. The expectation is that the appointment of a new Chief Revenue Officer (CRO) will enhance, not hinder, the company’s go-to-market strategy.
The financial institution’s confidence in monday.com’s long-term growth is rooted in its best-in-class unit economics, with the company achieving a Rule of 60+ profile in fiscal year 2024. This performance is seen as justifying a premium valuation compared to its peers, reflected in its current P/E ratio of 416.52. InvestingPro subscribers have access to 14 additional key insights about monday.com, including detailed valuation metrics and growth indicators. The platform’s comprehensive Pro Research Report offers deep-dive analysis of the company’s financial health and market position, helping investors make informed decisions.
In other recent news, monday.com has been the subject of several analyst price target adjustments following its strong financial performance. Cowen has raised its price target for the company to $385, citing a 32% revenue growth in the last quarter and a positive outlook based on macroeconomic stabilization and growth acceleration in the United States. Similarly, Needham has increased its price target to $400, recognizing the company’s robust quarterly results driven by enterprise growth and consistent demand in the United States.
DA Davidson has also adjusted its outlook, raising its price target from $300 to $350 while maintaining a neutral rating on the company’s shares. This adjustment comes in light of monday.com’s recent earnings report, which surpassed expectations and eased investor concerns about the company’s performance. Canaccord Genuity followed suit, increasing its price target to $375 and retaining a buy rating, acknowledging the company’s growth potential and favorable market positioning.
Lastly, Barclays (LON:BARC) has maintained its overweight rating on monday.com with a price target of $325. The firm’s decision is based on monday.com’s recent financial performance, which exceeded investor expectations, and the introduction of new AI pricing strategies. These developments highlight the company’s strong financial health and its ability to navigate market challenges, offering a promising outlook for investors.
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