Company Reports

We raise our fair value estimate for no-moat Monday.com to $230 per share, from $220, following the release of strong second-quarter results that surpassed our above-guidance revenue and profitability forecasts. Monday continues to execute well on a land and expand strategy, with robust net and gross retention, together indicating healthy demand for the nascent work management software niche. After an impressive first-half performance, we have raised our long-term revenue per customer assumptions and assume more rapid profitability improvement on scale-based operating leverage and internal efficiencies. At the time of writing, Monday shares rallied 12% in intraday trading Aug. 12 but continue to screen as fairly valued on a risk-adjusted basis.

Monday is a leading provider of work management software. The emerging niche within software as a service, or SaaS, aims to improve the efficiency and productivity of project and process management by displacing widely deployed but suboptimal incumbent tools of email and spreadsheets. Monday’s solution allows customers to digitize business processes and to plan, capture, manage, automate, templatize, and report on custom workflows around a single source of truth. We believe work management tools offer superior functionality relative to incumbent solutions including centralized dashboards providing real time visibility, accountability, and consistency across complex, cross-functional projects, automating workflows, and dynamically assigning tasks.

We raised our fair value estimate for no-moat Monday.com to $220 per share from $200 following the release of strong first-quarter fiscal 2024 results, which surpassed our above-guidance revenue and profitability expectations. The robust results reflect promising demand for the nascent work management software niche and illustrate the value add of Monday’s offering. On reassessing the firm’s outlook, we now factor in higher revenue per customer growth on improved pricing, a shift upmarket, greater product attach, as well as more rapid scale-based operating leverage. Monday shares spiked a sharp 20% post the strong release but continue to screen as fairly valued on a risk adjusted basis relative to our updated valuation.

Monday is a leading provider of work management software. The emerging niche within software as a service, or SaaS, aims to improve the efficiency and productivity of project and process management by displacing widely deployed but suboptimal incumbent tools of email and spreadsheets. Monday’s solution allows customers to digitize business processes and to plan, capture, manage, automate, templatize, and report on custom workflows around a single source of truth. We believe work management tools offer superior functionality relative to incumbent solutions including centralized dashboards providing real time visibility, accountability, and consistency across complex, cross-functional projects, automating workflows, and dynamically assigning tasks.

We launch coverage of work management software provider Monday.com with a $200 fair value estimate and a no-moat rating. Work management software is an emerging niche within SaaS, which aims to improve the efficiency and productivity of project and process management by displacing widely deployed but suboptimal incumbent tools of email and spreadsheets. On a risk-adjusted basis, Monday's shares currently screen as fairly valued relative to our valuation, and we prefer moatier competitor Smartsheet, which currently trades in 4-star territory.

Monday is a leading provider of work management software. The emerging niche within software as a service, or SaaS, aims to improve the efficiency and productivity of project and process management by displacing widely deployed but suboptimal incumbent tools of email and spreadsheets. Monday’s solution allows customers to digitize business processes and to plan, capture, manage, automate, templatize, and report on custom workflows around a single source of truth. We believe work management tools offer superior functionality relative to incumbent solutions including centralized dashboards providing real time visibility, accountability, and consistency across complex, cross-functional projects, automating workflows, and dynamically assigning tasks.