Shares of Monday.com Ltd (NASDAQ:MNDY) edged lower in early trading on Tuesday, after the company reported its second-quarter results.
Here are the key analyst takeaways:
- Cantor Fitzgerald analyst Thomas Blakey downgraded the rating from Overweight to Neutral, while cutting the price target from $112 to $90.
- DA Davidson analyst Lucky Schreiner reaffirmed a Buy rating and price target of $100.
- BTIG analyst Allan Verkhovski reiterated a Buy rating and price target of $105.
Check out other analyst stock ratings.
Cantor Fitzgerald: Monday.com’s revenue grew 22% year-on-year to $364.6 million and non-GAAP operating income came in at $61.1 million, with both figures topping estimates of $355.6 million and $46.6 million, respectively, Blakey said in the downgrade note. He added, however, that total NNARR (net new annual recurring revenue) fell both sequentially and year-on-year.
The newer-product NNARR softened during the second quarter as the company "simultaneously pivots its products and GTM (go-to-market) toward AI and enterprise," the analyst wrote.
Management indicated around $100 million in of annualized cost savings from restructuring, below the estimate of $160 million, with most of the savings expected to be "reinvested into talent, product and AI," he further stated.
DA Davidson: Monday.Com reported a "larger than typical" beat, Schreiner said. The company witnessed momentum in its AI products, which drove 17% of net new ARR, he added.
The analyst noted the following:
- Revenue growth decelerated sequentially by around 200 basis points (bps) to 22% year-on-year.
- Net new revenue contracted to $13 million, from $17 million in the year-ago quarter.
- Although ARR from new products improved to 11.6%, from 11.3% previously, this implies a year-on-year decline.
Management’s full-year revenue guidance was reiterated at $1.47 billion at the midpoint, which implies around 19% growth, "with management taking a cautious approach towards potential headwinds near term from the restructuring," he further wrote.
BTIG: Monday.com’s revenue growth decelerated to 21.9% year-on-year, from 24.5% in the first quarter, Verkhovski said.
While management was unlikely to fully reflect the second-quarter beat in their full-year guidance, "the more notable takeaway" is that they indicated a currency tailwind of 100-110 bps, the analyst stated. This implies a constant currency revenue growth guidance of around 18.3% at the midpoint, he added.
"This suggests MNDY exits FY26 growing 15.3% (13.8% CC), and as a result, we are lowering our FY27 total revenue growth estimate from 14.5% to 13%," the analyst further wrote.
MNDY Price Action: Shares declined by 1.85% to $86.98 at the time of publication on Tuesday.