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Investing.com - Wolfe Research lowered its price target on monday.com Ltd. (NASDAQ:MNDY) to $220.00 from $340.00 on Tuesday, while maintaining an Outperform rating on the stock. The stock has declined over 30% in the past week, with InvestingPro data showing it’s now trading near its 52-week low of $173.20.
The firm cited monday.com’s mixed second-quarter 2025 results, which showed strength in upmarket segments and customer relationship management, but revealed headwinds in downmarket segments. These downmarket challenges were attributed to changes in Google (NASDAQ:GOOGL)’s algorithm and shifting search trends during the quarter. According to InvestingPro data, the company maintains impressive gross profit margins of 89.5% and healthy financials with a current ratio of 2.57.
Monday .com experienced lower net customer additions across all product segments, while its net dollar retention rate decreased to 111%. The Enterprise segment remained the fastest-growing, with customers generating over $100,000 in annual recurring revenue now representing 26% of total ARR, up from 24% in the first quarter.
The company essentially reiterated its full-year 2025 revenue guidance with a modest $3.5 million increase against a $6 million second-quarter beat. The updated guidance now includes a foreign exchange growth contribution of less than 50 basis points, compared to the previously expected 50-100 basis point headwind.
Wolfe Research noted that monday.com’s billings declined 3% sequentially while growing 27% year-over-year, down from 29% growth in the first quarter of 2025. The firm believes the current share price decline "dramatically over-estimates" the actual business impact, given the higher quality of growth from upmarket customers who typically offer better retention and cross-sell opportunities.
In other recent news, monday.com has seen several adjustments in its stock price targets from various financial analysts. Following the company’s second-quarter financial results, which did not meet expectations, Needham lowered its price target for monday.com to $250 from $400, while maintaining a Buy rating. The report highlighted increased customer acquisition costs in the small and medium-sized business segment, impacting revenue projections. Meanwhile, DA Davidson adjusted its target to $275 from $325, citing reduced demand from small and medium-sized businesses due to changes in Google’s Search algorithm. Despite these challenges, DA Davidson maintained a Buy rating. Oppenheimer also lowered its price target to $300 from $350, noting a mixed outlook despite solid second-quarter results. JPMorgan reduced its target to $285 from $350, keeping a Neutral rating. These developments reflect ongoing adjustments as monday.com navigates market conditions and strategic challenges.
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