monday.com Shares Rise 13% in a Year: Buy, Sell or Hold the Stock?

monday.com MNDY shares have gained 13.1% in the trailing 12 months, underperforming the Zacks Internet – Software industry’s return of 18.5%. 

The company’s underperformance can be attributed to several near-term headwinds. Ongoing macro uncertainty is affecting enterprise spending and elongating sales cycles, leading to revenue unpredictability. High customer acquisition costs and longer sales cycles in the enterprise segment are straining short-term profitability. Additionally, fluctuations in attrition rates due to customer dissatisfaction, pricing increases and economic downturns could further pressure revenue growth in the coming quarters.

monday.com also faces long-term competition from companies offering similar platforms, including Asana ASAN, HubSpot HUBS and Freshworks FRSH. Asana primarily offers project and work management solutions, while HubSpot offers customer relationship management solutions. Freshworks offers a tool called Freshservice for enterprise service management. To compete successfully with these companies, monday.com must focus on factors like introducing new and improved features, and increasing acceptance of its products. Shares of Asana, HubSpot and Freshworks have lost 4.6%, 5.4% and 16.9%, respectively, in the trailing 12 months.

Despite these challenges, monday.com achieved several milestones in the past year. The company reported successful strategic expansion into the enterprise market and grew its seat count to 80,000. It added a record number of net new accounts in the CRM and Dev segments. Advancements in AI and product innovations, including a newly introduced AI vision in 2025 to help businesses scale, strengthen its competitive position. Despite slow enterprise customer additions and underperformance in the Dev segment during the third quarter of 2024, the company rebounded, showcasing its ability to navigate a dynamic market.

monday.com expects revenues in the band of $274.5-$276 million in the first quarter of 2025, suggesting growth of 26-27% year over year. The Zacks Consensus Estimate for MNDY’s first-quarter 2025 revenues is currently pegged at $277.66 million, indicating a year-over-year increase of 28.01%. 

The consensus mark for earnings is pegged at 68 cents per share, which has remained unchanged over the past 90 days. The estimate suggests year-over-year growth of 11.48%. MNDY beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, with the average surprise being 52.07%.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Conclusion: Hold MNDY Stock for Now

monday.com continues to strengthen its market position through its expanding enterprise presence, robust product portfolio and AI-driven innovations. The company reached $1 billion in annual recurring revenues in 2024, underscoring the strength of its Work OS platform and the increasing demand for its solutions. It completed the latest phase of mondayDB, mondayDB 2.0, enhancing the platform's scalability to support larger, more complex use cases. With AI momentum driving new features and integrations, Monday.com is well-positioned for long-term growth as businesses increasingly adopt digital work management solutions. However, challenges remain, including longer enterprise sales cycles, high acquisition costs, and competition from companies offering similar solutions. Additionally, its subscription-based model exposes it to renewal risks and economic uncertainty.

monday.com currently carries a Zacks Rank #3 (Hold), suggesting that it may be wise for investors to wait for a more favorable entry point in 2025. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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