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On Friday, Scotiabank (TSX:BNS) analyst Allan Verkhovski increased the price target for monday.com Ltd. (NASDAQ:MNDY) shares to $330 from the previous $315, while keeping a Sector Outperform rating on the stock. Currently trading at $277.13 with a market capitalization of $14.07 billion, monday.com has caught analysts’ attention, with targets ranging from $265 to $450. The adjustment reflects the analyst’s positive outlook on the company’s financial performance and product developments. According to InvestingPro data, the company’s overall financial health score is rated as "GREAT."
Verkhovski’s optimism is based on monday.com’s strong year-to-date performance, with shares climbing 17.71%. The company has demonstrated robust growth with revenue increasing 33.21% over the last twelve months, maintaining impressive gross profit margins of 89.33%. The analyst anticipates that the company will report a significant revenue beat for the first quarter and will improve its guidance when it releases earnings on May 12, 2025. The momentum from the fourth quarter of the previous year is expected to persist, buoyed by the company’s ability to help customers enhance workflow efficiency and navigate economic challenges.
The analyst highlighted that monday.com’s cost-effective and flexible business model is particularly beneficial for businesses during times of economic uncertainty. InvestingPro analysis reveals that the company holds more cash than debt on its balance sheet and maintains a healthy current ratio of 2.66, indicating strong financial flexibility. The company’s artificial intelligence (AI) capabilities are reportedly allowing customers to achieve more with less, as evidenced by the high demand for AI Blocks. Clients have been swiftly utilizing their 500 free AI credits, with some opting to purchase additional credits.
Verkhovski noted that while substantial AI monetization might not happen until fiscal year 2026, the near term should see pricing adjustments and rising adoption rates. He expressed increased confidence in the company’s ongoing product cycle and monetization prospects, especially with the upcoming launches of Power-ups and Agents features.
The analyst also pointed out that monday.com is one of the most undervalued companies according to the Rule of 40 metric, which balances growth and profitability, when adjusted for enterprise value to free cash flow growth. The new price target of $330 is based on a multiple of 11 times the calendar year 2026 enterprise value to sales and 40 times fiscal year 2026 enterprise value to free cash flow. For deeper insights into monday.com’s valuation and growth prospects, including 8 additional ProTips and comprehensive financial metrics, explore the detailed Pro Research Report available on InvestingPro.
In other recent news, monday.com Ltd. reported impressive financial results, with fourth-quarter 2024 revenue increasing by 32% year-over-year to $268 million and full-year 2024 revenue growing by 33% to $972 million. Tigress Financial Partners raised its 12-month price target for monday.com to $450, citing the company’s AI integration as a key growth driver. UBS also adjusted its price target to $310, maintaining a Neutral rating, while highlighting a fiscal year 2025 revenue growth forecast of 26-27% on a constant currency basis. Meanwhile, Citi selected monday.com as one of its top stock picks, noting its attractive valuation and growth prospects.
In a strategic move, monday.com appointed Casey George as Chief Revenue Officer to enhance its enterprise market presence. George’s extensive experience is expected to support the company’s growth in enterprise adoption. UBS’s analysis reflected a conservative stance, with the fiscal year 2025 revenue growth estimate revised downward to 25% from 27%. Despite some caution, UBS acknowledged the company’s solid performance, raising its fiscal year 2025 revenue estimate to $1,221 million. These developments indicate a focus on expanding enterprise reach and leveraging AI advancements for sustained growth.
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