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Investing.com - TD Cowen has lowered its price target on monday.com Ltd. (NASDAQ:MNDY) to $290 from $360 while maintaining a Buy rating on the stock. The company, which maintains an impressive 89.5% gross profit margin and holds more cash than debt on its balance sheet, has seen its shares decline over 30% in the past week.
The firm cited mixed second-quarter results, with revenue growth of 27% representing a 1.8% beat in dollar terms, which fell below the trailing twelve-month average beat of approximately 2.5%.
TD Cowen noted that monday.com’s small and medium-sized business (SMB) segment is experiencing pressure, primarily due to Google (NASDAQ:GOOGL)’s shift toward AI search, although the Enterprise segment remains healthy with record net customer additions.
Despite slightly raising its fiscal year 2025 guidance, monday.com likely lowered its constant currency outlook by approximately 50 basis points, according to the research firm.
Shares of monday.com have fallen approximately 30%, which TD Cowen suggests has created a valuation disconnect relative to the company’s growth profile, with the stock trading at roughly 20 times enterprise value to estimated free cash flow for calendar year 2026.
In other recent news, monday.com has seen a series of adjustments to its stock price targets by various financial firms, reflecting mixed sentiments on its growth outlook. Piper Sandler reduced its price target for monday.com to $300 from $325, maintaining an Overweight rating and suggesting the recent sell-off in shares was excessive. Morgan Stanley (NYSE:MS) upgraded monday.com to Overweight from Equalweight, despite lowering the price target to $260 from $330, citing the company’s strategic shift towards a multi-product approach and a sales-led growth model. Wolfe Research also lowered its price target significantly to $220 from $340, pointing to mixed second-quarter results with strengths in upmarket segments but challenges in downmarket areas due to changes in Google’s algorithm. JPMorgan adjusted its price target to $285 from $350 while keeping a Neutral rating, indicating a cautious stance on the company’s prospects. DA Davidson decreased its price target to $275 from $325, attributing the change to decreased demand from small and medium-sized businesses, affected by Google’s Search algorithm updates. These recent developments highlight varying perspectives on monday.com’s performance and potential, influenced by both internal strategies and external market factors.
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