Monday.com’s Revenue Forecast Disappoints, Shares Plunge

Bassyonni

ago 2 hours

Monday.com’s Revenue Forecast Disappoints, Shares Plunge

Monday.com (MNDY) has recently experienced a significant drop in its stock value following its third-quarter earnings report. Despite exceeding Wall Street’s revenue and earnings expectations, the company’s revenue forecast disappointed investors, leading to an 18% decline in share price.

Q3 Earnings Overview

For the quarter ending September 30, Monday.com reported an adjusted profit of $1.16 per share, marking a 36% increase from the previous year. Revenue for the period rose by 26% to reach $316.9 million. Analysts had projected an adjusted profit of 88 cents per share, with a revenue estimate of $312.3 million. Comparatively, the company reported earnings of 85 cents per share on revenue of $251 million during the same quarter last year.

Disappointing Revenue Guidance

Looking ahead, Monday.com has projected revenue of $329 million for the current quarter ending in December 2023. This figure falls short of analysts’ estimates, which averaged at $333.7 million. Chief Financial Officer Eliran Glazer acknowledged the need for a balanced approach, emphasizing responsible scaling of the business alongside investments in innovation and operational discipline.

Market Reaction

The market reacted sharply to these revelations, with MNDY shares plunging to approximately $155.49 in the early trading hours, hitting a two-year low. This sharp downturn followed a previous 18% decline in MNDY stock earlier in 2024. Notably, shares fell by 29.8% on August 11 in response to disappointing Q2 results.

Competitive Landscape

Monday.com faces tough competition from several companies in the project management sector, including Asana (ASAN), Smartsheet (SMAR), and Atlassian (TEAM). Founded in 2012, Monday.com made a notable entrance into the public market in June 2021, raising $574 million during its IPO when shares were priced at $155.

Stock Ratings

Composite Rating: 53 out of a possible 99
Accumulation/Distribution Rating: D

This rating indicates that there has been heavy selling pressure on the stock, with investors advised to monitor its performance closely. Investors are encouraged to analyze the broader market trends, as well as company-specific developments in the coming weeks.