Wells Fargo initiated coverage of monday.com Ltd. (MNDY (NASDAQ:MNDY)) and GitLab Inc (GTLB) with Overweight ratings in separate notes on Tuesday. The bank assigned MNDY a $260 price target, while GTLB was given a $70 target.
Analysts at Wells Fargo said MNDY has multiple attractive growth levers, including up-market progress and new product cycles, to maintain outsized growth/margin expansion.
"We view monday.com as a leader in a large, $150Bn+ market," wrote analysts at Wells Fargo, noting the company's differentiated work management platform.
"MNDY shares are currently trading at 10.5x NTM EV/S, in line to modestly below high-growth software peers," argues the firm.
Wells Fargo notes that with GitLab shares -21% off since the company's fourth-quarter earnings, the FY25 model now more conservatively set, and an AI-led product cycle taking shape, they see an opportunistic entry for in the company's shares.
"We view GTLB as a consolidator in the expansive (+ fragmented) DevSecOps landscape, offering tools spanning the entire software toolchain (vs. most peers w/ point solutions)," wrote analysts at Wells Fargo.
"Further, we see the debate around AI reducing number of devs in the market as largely overstated; expect AI shift grows the number of addressable users over time given proliferation of software/applications, AI's expansion to citizen devs, GTLB's product expansion outside core devs."