Monday.com (MNDY) started the week with a bang, reporting Q4 earnings that managed to beat the FactSet consensus on the top and bottom lines. But, shares are down more than 9% this morning.
The project management software grew revenue by 35% to $202.6 million, well above the FactSet consensus of $198 million. Net operating income of $21.2 million also surpassed the guidance of $7 million to $9 million. Meanwhile, non-GAAP earnings came in at more than double the 32 cents that was expected with 65 cents per share.
Looking at the full year for 2023, Monday.com performed well. Full-year revenue of $729.7 million represented 41% growth and came in above the guidance range of $723 million to $725 million. The company also reported net income of $61.6 million, easily beating the estimate of $47 million to $49 million.
For the first quarter of 2024, Monday.com is expecting to fall between a range of $207 million and $211 million. Wall Street had previously forecasted $209 million. Free cash flow should fall between $56 million and $60 million – again, ahead of the estimate analysts are forecasting.
This quarterly guidance was coupled with guidance for the full year, too. The company is expecting to deliver revenue between $926 million and $932 million alongside free cash flow of $200 million to $206 million.
Monday.com also recently highlighted its new pricing plans in an effort to boost revenue and profitability. This will be the first increase in 5 years, and prices could surge anywhere from 13%-20%.
This may be where some of the uncertainty stems from as shares have gone into the red on what would otherwise be seen as great news. Speaking of uncertainty, CFO Eliran Glazer took the chance to let investors know the company is confident in its ability to continue the momentum from 2023 through 2024 – despite economic and geopolitical challenges.
Even with today’s performance, MNDY is still up 17% through the first 6 weeks or so of 2024. But, where does this leave investors – should you buy or sell this stock?
We’ve taken a look through the VectorVest stock analysis software and found 3 things to help you make your next move with complete clarity.
MNDY Has Poor Upside Potential, But it Has Fair Safety and Good Timing
The VectorVest system simplifies your trading strategy by giving you clear, actionable insights in 3 simple ratings: relative value (RV), relative safety (RS), and relative timing (RT). Each sits on its own scale of 0.00-2.00, with 1.00 being the average.
This makes interpretation quick and easy, saving you time and stress while empowering you to win more trade with less work. But, you’re even given a clear buy, sell, or hold recommendation for any given stock at any given time to eliminate any uncertainty and guesswork. As for MNDY, here’s the current situation:
- Poor Upside Potential: The RV rating compares a stock’s long-term price appreciation potential (forecasted 3 years out) to AAA corporate bond rates and risk. It offers a much better picture than a standard comparison of price to value alone. The RV rating of 0.77 is poor for MNDY.
- Fair Safety: The RS rating is a risk indicator. It’s calculated from an analysis of the company’s financial consistency & predictability, debt-to-equity ratio, business longevity, sales volume, price volatility, and other factors. MNDY has an RS rating of 0.87, a bit below the average but fair nonetheless.
- Good Timing: The RT rating is based on the direction, dynamics, and magnitude of the stock’s price movement and is calculated day over day, week over week, quarter over quarter, and year over year. Even with today’s performance, MNDY has good timing with an RT rating of 1.16.
All this considered, MNDY has a fair VST rating of 0.97 - just below the average. The stock is currently rated a HOLD in the VectorVest system - but we encourage you to learn more about this situation through a free stock analysis today!
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VectorVest advocates buying safe, undervalued stocks, rising in price. MNDY is falling despite delivering an earnings beat on the top and bottom line alongside optimistic guidance for 2024. The stock has fair safety and good timing, but its upside potential is poor right now.
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