Trading was muted this morning after coming off of a losing week amid red-hot inflation data. Still, the major averages are not far from their record highs. The S&P 500 is 0.8% off its all-time high. The Dow and Nasdaq sit 1.3% and 1.2%, respectively, away from their records.
Our trade alert for today highlights one of the fastest-growing names in the cloud-based software space. Last week the company wowed with stellar Q3 earnings, but their stock is down 18% since their earnings call. Find out what happened and why the pullback could provide an excellent opportunity to get involved below.
The Monday.com (MNDY) Work OS open platform is fully customizable and allows organizations to easily build software applications and work management tools to fit their needs. The platform is currently used by over 127,000 customers across over 200 industries in 190 countries.
Since going public in June, Israeli cloud-based software firm Monday.com has become one of the most-watched IPOs of the year. From the low of its IPO on June 10 until a peak last Tuesday ahead of its company’s call, Monday.com rose 150%. The stock has lost 18% since, despite reporting an impressive 95% acceleration in revenue growth.
While not yet profitable, Monday.com has generated eight quarters of strong sales growth. Revenue gains have been more than 85% for each quarter during that period. Plus, the company has zero debt.
Monday reported another winning quarter last week, blowing past analyst estimates of $0.06 earning per share for the third quarter, reporting $0.26 EPS. The company exceeded consensus expectations of $74.68 million in revenue, reporting $83 million in revenue for the quarter. “We achieved another strong quarter of top-line growth driven by the continued rapid adoption of our Work OS by new customers along with expansion within our existing customer base,” said Monday.com founder and co-CEO Roy Mann. “As Enterprise customers adopt our Work OS and realize its value, their usage quickly expands across use cases and departments.”
Jefferies analyst Brent Thill raised the firm’s price target on Monday.com to $400 from $340 as he raised his FY21 estimates after the company delivered another “beat and raise” quarterly report. The analyst admits his new FY22 estimate of 39% growth “looks conservative” and that he is “enthusiastic on fundamentals.”
The 9 analysts offering 12-month price forecasts for Monday.com Ltd have a median target of $450, representing a 24% increase from the last price. The consensus among 10 polled analysts is to buy MNDY; 8 rate the stock a Buy, and 2 give it a Hold rating. There are currently no Sell ratings for the stock.
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