Morgan Stanley upgrades monday.com after steep share drop

Published 12/08/2025, 15:20
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Investing.com -- Morgan Stanley upgraded monday.com Ltd to Overweight” from Equal Weight, saying the recent sharp decline in the work management software maker’s shares has created a buying opportunity.

Shares have fallen about 40% over the past month and about 30% on Monday alone after second-quarter results topped Wall Street estimates but failed to deliver the stronger growth some investors expected.

The company also raised its 2025 revenue outlook, though the upgrade was smaller than hoped.

Analyst focus has turned to the company’s comments on how changes to AI-powered search results could affect paid search advertising, which drives new customer acquisition.

Morgan Stanley (NYSE:MS) said the impact appeared modest and was outweighed by other growth drivers, including expansion into multiple products, a push into larger enterprise clients and add-on services.

The brokerage said monday.com now trades at a steep discount to peers despite facing similar industry trends, and that it expects the company to maintain annual revenue growth above 20% with strong free cash flow margins.

It pointed to a planned investor day on Sept. 17, when monday.com is expected to unveil a multi-year outlook and possibly a new product, likely in human resources software, as potential catalysts for the shares.

“Skinnier beat against higher expectations and focus on paid search commentary drove shares meaningfully lower, creating the entry point for which we’ve been waiting,” analysts at Morgan Stanley said.

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