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Investing.com - Morgan Stanley (NYSE:MS) has upgraded monday.com Ltd. (NASDAQ:MNDY) from Equalweight to Overweight while simultaneously lowering its price target to $260.00 from $330.00. The stock, which has declined over 30% in the past week, currently trades near its 52-week low of $173.20. According to InvestingPro analysis, the company maintains impressive gross profit margins of 89.5% and shows strong financial health metrics.
The upgrade comes as the software company continues its strategic shift toward moving upmarket, expanding to a multi-product approach, and transitioning to a sales-led growth model.
Morgan Stanley acknowledges these strategic changes come with inherent risks but notes they "come from a position of strength and represent a large and compelling opportunity."
The firm expressed confidence in monday.com’s ability to successfully navigate most of these major operational changes despite the challenges they present.
Morgan Stanley believes the market is undervaluing monday.com’s potential, noting the company trades at less than 20 times enterprise value to free cash flow (EV/FCF), which the firm considers an attractive valuation given the growth opportunity.
In other recent news, monday.com has faced multiple adjustments in its stock price targets following its second-quarter 2025 financial results. Wolfe Research lowered its price target to $220, citing mixed results with strengths in upmarket segments but challenges in downmarket areas due to changes in Google (NASDAQ:GOOGL)’s algorithm. JPMorgan also adjusted its price target to $285, maintaining a Neutral rating on the company’s stock. Similarly, DA Davidson reduced its price target to $275, pointing to weakness in new demand from small and medium-sized businesses affected by Google’s Search algorithm changes. Oppenheimer decreased its target to $300, noting that while the company delivered solid results, revenue gains did not fully translate into stronger future guidance. Needham lowered its price target to $250, following earnings that fell below expectations and highlighted increased customer acquisition costs in the SMB segment. These developments reflect the analysts’ responses to monday.com’s recent performance and market conditions.
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