On Monday , Barclays adjusted its outlook on monday.com Ltd. (NASDAQ:MNDY (NASDAQ:MNDY)), increasing the shares target to $325 from the previous $300 while maintaining an Overweight rating.
The firm's analysis points to a robust third quarter performance by monday.com's largest reseller partner, driven by various factors including pricing strategies, customer base expansion, and changes in the partner's business operations.
The reseller's strong pipeline for the fourth quarter was also noted, alongside the growing adoption of WorkCanvas, an add-on feature that does not require a monday.com license and is sold separately. This feature is seen as a significant opportunity for average contract value (ACV) expansion. The reseller's feedback suggests that WorkCanvas is gaining traction among customers.
Additionally, the reseller partner anticipates that monday CRM users will likely adopt monday Service at a high rate due to its cost-effective solution for integrating CRM and ticketing services. This perspective supports the view that monday.com's customer relationship management software could foster further product integration.
Barclays also highlighted the potential for growth in managed services and WorkCanvas beyond the current fiscal year. The reseller has already secured managed service clients and recorded approximately $300,000 to $350,000 in license fees for WorkCanvas for the upcoming year. This early success indicates a promising avenue for revenue growth for monday.com in 2025.
In other recent news, monday.com Ltd. has seen positive developments in both its financial performance and market position. The company has achieved $1 billion in annual recurring revenue, following a 34% increase in second-quarter revenue and record GAAP profitability.
Analysts project that the firm's full-year revenue for fiscal year 2024 will range between $956 million and $961 million. Recent pricing adjustments are expected to contribute a $25 million benefit in 2024, and between $75 million and $80 million by 2026.
In the realm of mergers and acquisitions, monday.com recently acquired Smartsheet (NYSE:SMAR), a move that has been positively received by analysts from firms such as JPMorgan, Needham, Goldman Sachs, BofA Securities, and Loop Capital. The acquisition is viewed as a strategic step towards expanding the company's market share.
Analyst firms including DA Davidson, Wells Fargo, TD Cowen, JPMorgan, and Needham have updated their outlooks on monday.com. DA Davidson raised its price target to $300, maintaining a Neutral stance. Wells Fargo reiterated its Overweight rating with a price target of $315. TD Cowen increased its target to $320, maintaining a Buy rating. JPMorgan and Needham maintained their targets at $300.
monday.com's recent developments highlight the company's strong execution and potential for growth in a variable macroeconomic environment. The company's focus remains on expanding its platform's capabilities and continuing product innovation, with an emphasis on its growing CRM offerings and potential for broader market opportunities.
InvestingPro Insights
Building on Barclays' optimistic outlook for monday.com Ltd. (NASDAQ:MNDY), recent InvestingPro data and tips offer additional context to the company's financial position and market performance.
MNDY's revenue growth of 35.22% over the last twelve months aligns with Barclays' positive assessment of the company's expansion potential. This growth is further supported by an InvestingPro Tip indicating that analysts anticipate continued sales growth in the current year. The company's impressive gross profit margin of 89.19% suggests a strong ability to capitalize on its revenue growth, potentially benefiting from the adoption of new features like WorkCanvas.
Another InvestingPro Tip reveals that MNDY holds more cash than debt on its balance sheet, which could provide the financial flexibility needed to invest in growth initiatives such as the expansion of managed services and WorkCanvas, as highlighted in the Barclays report.
The market seems to be recognizing MNDY's potential, with the stock trading near its 52-week high and showing a strong return of 74.46% over the last year. This performance aligns with Barclays' increased price target and Overweight rating.
For investors seeking a more comprehensive analysis, InvestingPro offers 16 additional tips for MNDY, providing a deeper understanding of the company's financial health and market position.
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