Shares of project management software maker Monday.com (NASDAQ:MNDY) fell 18.3% in the morning session after the company reported disappointing third-quarter financial results, with revenue in line with analyst estimates. Revenue expectations for the next quarter were also largely in line with expectations. Notably, subdued sales expectations for next quarter implied revenue growth of around 28-29%, suggesting growth may be slowing.
Monday.com also announced a change in leadership. Yoni Osherov, Chief Revenue Officer (CRO) of monday.com, is expected to leave his position at the end of December 2024. With the company still looking for his replacement, there is an added element of uncertainty facing the markets. of. It’s not hard to see why the markets would have a hard time digesting this news, as Osherov was seen as crucial to the company’s growth, helping its ARR (annual recurring revenue) rise from $10 million to well over $1 billion.
On a more positive note, earnings (non-GAAP EPS) exceeded Wall Street expectations as gross margin increased slightly from the prior year, while operating margin was in line.
Overall, this was a mixed quarter, with the stock’s reaction indicating markets are becoming increasingly agitated by slowing revenue growth and uncertainty caused by the leadership update.
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Monday.com shares are quite volatile, having seen 17 moves of more than 5% in the past year. But such big moves are rare even for Monday.com and indicate that this news has significantly affected the market’s perception of the company.
The biggest move we wrote about in the past year was six months ago, when the stock rose 23.8% on news that the company reported a beat and raise quarter. Monday.com has significantly improved net revenue retention. Sales also exceeded Wall Street expectations.
Looking ahead, the company has raised its full-year guidance across the board. The full year operating profit increase was particularly strong, showing that the company is more profitable than expected. Overall, results this quarter were great and shareholders should be optimistic.
Monday.com is up 52.4% year-to-date, but at $271.50 per share it is still trading 16.3% below its 52-week high of $324.31 set in November 2024. Investors looking for Bought $1,000 worth of Monday.com shares on the stock exchange The IPO in June 2021 would now be looking at an investment worth $1,516.
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