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Investing.com -- Baird upgraded Monday.com to Outperform in a note to clients on Wednesday, citing the stock’s recent pullback and growing confidence in the company’s platform leadership in an evolving AI-driven software landscape.
“We are upgrading MNDY to Outperform as we see the company leveraging its early CWM lead to execute on this opportunity,” Baird analysts wrote in a note to clients.
Monday.com, a cloud-based work management platform, has seen its shares drop 21% since July, while the S&P 500 gained 2%.
Baird said the sell-off had created a compelling entry point. “We view current level as attractive,” analysts said, noting that the stock is trading at roughly eight times next-twelve-month revenue and 38 times next-twelve-month free cash flow.
The firm highlighted three key reasons for its bullish turn: “1) we see potential for MNDY to leverage early leadership in CWM into a broader platform-driven company delivering GenAI value, 2) we view shares as under-owned and the combination of superior growth and FCF margins as attractive, and 3) we view current level as attractive.”
Unlike competitors, Baird said, “MNDY has ‘productized’ its platform in a way that delivers value around use-cases and buying centers.”
The analysts added that investor interest remains high and said they expect “solid Q2 results.”
Looking ahead, Baird sees additional catalysts on the horizon. “We expect solid Q2 results and like the catalyst path into the September user conference and investor day,” the note said. Monday.com is scheduled to report results on August 11.