monday.com MNDY is an enterprise software company that is posting impressive earnings and revenue growth. MNDY stock has doubled the Zacks Tech sector over the past two years, rising 190%.
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Monday.com posted a strong beat-and-raise third quarter on November 11, helping it earn the Zacks Rank #1 (Strong Buy). Still, MNDY shares are trading roughly 25% below their all-time highs, even as the Nasdaq and many big tech stocks look a bit overheated in the near term.
The basis of Monday.com’s activities is its work-oriented operating system. Work OS from Monday.com is a “low code-no code” platform that helps companies build work management tools and software applications across industries.
Monday.com operates in a crucial growth segment, as companies and startups of all stripes must digitize their workflows to thrive in the modern economy.
Monday.com has amassed more than 225,000 customers across 200 industries in more than 200 countries. The company boasts an impressive net dollar retention rate of 111% (in the third quarter), demonstrating its ability to maintain existing revenue from current customers when upgrades, downgrades and churn are taken into account.
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Monday.com is expanding its reach with larger customers, although it is still built on the backs of smaller companies. MNDY grew its paid customer base by 44% in the third quarter with over $100,000 in annual recurring revenue.
The company highlighted that its “second largest customer – an international technology company – more than doubled the number of seats from 25,000 to 60,000.”
Monday.com grew third-quarter revenue 33% to $251 million, while ARR surpassed $1 billion during the period. MNDY also increased third-quarter adjusted earnings per share by 33%, after swinging from a full-year loss of -$0.73 in 2022 to +$1.85 per share in 2023.
The enterprise software company’s FY24 consensus earnings estimate has risen 16% since its release on Nov. 11, while the FY25 estimate is 13% higher. MNDY’s recent bullish EPS outlook earns it a Zacks Rank of #1 (Strong Buy) and is part of an impressive rise in earnings revisions.
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Monday.com is expected to grow its adjusted earnings by 73% in FY24 and 12% next year. MNDY has exceeded our EPS estimates by an average of 72% over the last four quarters.
MNDY is expected to grow its revenue by 32% in 2024 and 26% in 2025, to $1.21 billion versus $729.7 million in 2023. This expansion is in addition to the 41% growth in FY23 and the increase in 68% in 2022.
