Monday.com Shares Down 30% After Earnings Release, Analysts Cut Forecasts

Shares of Monday.com Ltd (NASDAQ:MNDY) recorded gains in early trading on Tuesday, after the company Monday reported upbeat second-quarter results.

Here are some key analyst takeaways.

• Morgan Stanley analyst Josh Baer upgraded the rating from Equal-Weight to Overweight, while cutting the price target from $330 to $260.
• Piper Sandler analyst Brent Bracelin maintained an Overweight rating, while reducing the price target from $325 to $300.

Check out other analyst stock ratings.

Morgan Stanley: Although Monday.com reported its second-quarter results ahead of consensus estimates and raised its full-year guidance, they both fell short of market expectations, Baer said in the upgrade note. He added that this was because the beat was "skinnier" than usual and the upside did not flow through to the full-year projections.

"Analyst and investor focus centers on commentary around impacts to top-of-funnel from changes to AI search results," the analyst wrote. The upgrade in rating follows the steep decline in the company's shares, which were down 30% on Monday after the earnings release and down 40% over the past month, he further stated.

Piper Sandler: Monday.com's revenues grew by 27% year-on-year to $299 million, representing a slowdown from the previous quarter's 30%, Bracelin said. This represented a topline beat of $6 million.

This was the first quarter in which Monday.com reported revenue growth of less than 30%, the analyst stated. "Second, multi-product momentum implies the core WM ARR might moderate below 20% for the first time.”

Price Action: Shares of Monday.com had risen by 2.67% to $178.78 at the time of publication on Tuesday.

Read More:

• Monday.com Extends AI Push, Grows Big-Client Base — Market Unimpressed

Image: Shutterstock