Hook / Thesis
The narrative that "the death of software" is underway is loud, but sloppy. monday.com (ticker: MNDY) has been caught in that same crossfire — the stock is trading far below its prior cycle highs while the product and customer base that made it a category leader remain intact. I view the recent sell-off as an overreaction to headline risk and short-term growth noise rather than a signal that monday.com's market opportunity has evaporated.
That makes MNDY a top pick for a disciplined long: buy in the current ~148 price area with a tight stop and staged targets. The idea is not to assume a return to peak multiples overnight, but to capture a multi-leg recovery as the company tangibly monetizes new platform features (AI and enterprise controls) and proves retention and expansion at scale.
What monday.com does and why it matters
Business in a sentence: monday.com operates a SaaS work management platform that helps teams coordinate projects, build workflows and centralize approvals. The company bills per seat across pricing tiers and sells up-market into marketing, product, IT and enterprise use cases.
The market should care because work management is a high-frequency, sticky use case inside organizations. Once a team standardizes processes and automations on a platform, seat expansion and cross-sell into other groups become straightforward. That stickiness supports recurring revenue and favorable payback dynamics when product-market fit is solid.
Concrete scale: as of fiscal 2024 the business reported more than 245,000 customers. That installed base gives monday.com a runway for both seat growth and higher average revenue per user (ARPU) through deeper workflow automation, enterprise controls and AI-assisted templates.
Why the market mispriced MNDY
Two things drove the sharp re-rating last cycle: multiple compression in growth software generally, and headline-driven selling episodes tied to quarterly execution that pressured sentiment. The price history shows a sharp move from cycle highs above 326 down to current levels around 148.03 - a decline of roughly 55% from the dataset's peak. That’s a valuation haircut large enough to absorb several quarters of growth misses without permanently impairing the upside if growth normalizes.
Importantly, daily snapshot data shows intraday stability: recent trading range sits between a low of 146.41 and a high near 149.40, and volume profiles indicate active interest rather than outright abandonment. Mixed headline activity (institutional buys and small sell blocks) suggests rotating positioning rather than structural insolvency.
Valuation framing
The dataset does not include a contemporaneous market capitalization or share count, so absolute multiple math would require outside inputs. That said, a few observations are useful for framing value:
- Relative to its own history, the stock now trades materially below its peak price of roughly 326, implying the market is pricing in a significantly lower revenue run-rate or a much lower multiple on the same revenue base.
- Without peers in the dataset, direct multiple comparisons are unavailable. Qualitatively, top-tier SaaS comps trade on the premise of durable revenue growth and margin expansion; if monday.com can show similar retention/expansion, a partial multiple recovery is reasonable.
- Because monday.com's revenue model is per-seat recurring billing, a base of 245,000 customers provides optionality: even single-digit ARPU growth and improved seat penetration within existing accounts translate into meaningful revenue lift without needing large customer acquisition leaps.
Trade idea - actionable plan
Trade direction: Long MNDY
Time horizon: Swing / short position (3-6 months), but this can be held longer if the stock clears the first target and fundamentals show durable improvement.
Position sizing: Size to risk no more than 3-5% of account capital lost to this trade (i.e., keep the stop disciplined).
Entry: 140-155. The stock currently sits at 148.03; I prefer initiating around 148 and averaging in up to 155 if momentum holds.
Stop-loss: 125. That level is both psychologically and technically meaningful given recent trading ranges; a drop below 125 argues the relief-rally thesis has failed and momentum has turned decisively negative.
Targets:
- Near-term target: 190 — a ~28% upside from current levels and a zone where multiple compression begins to moderate versus the low base.
- Medium-term target: 260 — achievable if the company reports sequential improvement in customer expansion or shows successful monetization of AI features.
- Stretch target: revisit prior cycle levels (>300) only if the combination of growth re-acceleration and multiple re-rating materializes.
Catalysts to watch (2-5)
- Product monetization of AI - any clear examples of AI-driven ARPU lift (e.g., AI templates, automation that reduces seat churn) will validate upside.
- Enterprise bookings and longer-term contracts - movement up-market reduces churn risk and increases revenue visibility.
- Quarterly retention/expansion metrics - deceleration in net revenue retention is the chief gating item; stable or improving NRR is a positive catalyst.
- Positive research/investor notes and institutional buying (recent filings show both buys and small blocks of selling) that shift sentiment back toward accumulation.
Key supporting datapoints
- Customer base: >245,000 customers as of fiscal 2024, which is a reasonably large install base to drive seat expansion.
- Recent intraday price: close of 148.03 with a prior-day close near 147.67, showing a tight trading range and some price stability.
- Historical peak in the dataset of roughly 326.58 indicates how much valuation compression has occurred - the market has already priced a significant growth shortfall.
- News flow shows both institutional buys and small sell blocks in late 2025, indicating reallocation rather than uniform pessimism (examples: Crosslink increased stake on 12/06/2025, while small block selling reported on 12/23/2025).
Risks and counterarguments
No trade is without risk. Below are the principal reasons this long could fail and what would make me change my mind.
- Macro and multiple risk: If the software multiple compression continues (driven by rising rates or a prolonged bear market for growth stocks), the stock can fall further even with stable fundamentals. This is the largest market-level risk.
- Execution risk: Monday.com must continue to convert product usage into ARPU gains and contain churn. If net revenue retention meaningfully deteriorates, the revenue base could stagnate and the stock will reprice lower.
- Competitive pressure: Large incumbents (enterprise suites and CRM platforms) can bundle overlapping workflow capabilities or undercut pricing, limiting upside for smaller standalone platforms.
- Headline-driven volatility: The company is subject to outsized swings from earnings misses or guidance shortfalls. That can make the path to targets noisy and require active risk management.
- Liquidity/positioning risk: Institutional rotation noted in filings could produce concentrated flows out of the stock, exaggerating short-term downside.
Counterargument
One credible counterargument is that the market isn’t just penalizing monday.com for a cyclical hiccup, but is correctly forecasting a secular slowdown in seat growth and ARPU expansion as competing platforms consolidate and customers rationalize subscriptions. If a multi-quarter pattern of declining expansion revenue and rising churn emerges, the recovery thesis is invalid. That scenario would push me to exit at or below the stop and reassess whether the franchise can re-earn a premium multiple.
Conclusion - clear stance and what would change my mind
Stance: constructive on monday.com at current levels. The market has likely overreacted to a combination of multiple compression and short-term execution noise. With a >245k customer base and visible product-led monetization avenues (AI, automations, enterprise controls), the upside to a staged recovery is attractive when balanced against a disciplined stop.
What would change my mind:
- Sustained deterioration in net revenue retention or a material increase in churn across core cohorts.
- Clear loss of enterprise adoption - if upsells to IT/product/marketing slow and the installed base stops expanding seats, that undermines the thesis.
- Adverse macro that induces a second wave of multiple compression across the sector, making relative-value recovery unlikely in the swing horizon.
Execution checklist for traders: enter 140-155, stop 125, take profits at 190 and 260. Keep position sizing prudent and revisit after the next couple of quarterly results or a meaningful change in retention/expansion metrics.
Disclosure: This is a trade idea, not a recommendation to buy or sell. Always consider your own risk tolerance and consult a financial advisor before trading.