Monday.com MNDY is slated to report fourth-quarter fiscal 2024 results on Feb. 10.

The Zacks Consensus Estimate for fiscal fourth-quarter revenues is pegged at $261.14 million, indicating an increase of 28.91% from the year-ago quarter. The company expects total revenues in the range of $60-$262 million, indicating year-over-year growth of 28-29%.

The consensus estimate for MNDY’s earnings has remained steady at 78 cents per share over the past 30 days, indicating an increase of 20% from the year-ago quarter.

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In the last reported quarter, Monday.com delivered an earnings surprise of 39.34%. The company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 71.62%.

Earnings Whispers for MNDY

Our proven model does not conclusively predict an earnings beat for Monday.com this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

MNDY has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell) at present. 

You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors Shaping Upcoming MNDY Results

Monday.com is set to report its fourth-quarter fiscal 2024 results amid expectations of continued growth, though potentially at a more moderate pace compared to recent quarters. Several key factors are expected to have influenced the company's performance in the fiscal fourth quarter. The ongoing price increase implementation, which began in early 2024, has shown positive momentum with minimal customer pushback. Management indicated the price increases could contribute approximately 200 basis points to net dollar retention rates in fiscal 2024. 

The company has rolled out new pricing to about 50% of customers, with a total expected impact of $80 million between fiscal 2024 and 2026. MNDY’s enterprise segment momentum remains an important focus area after some softness in third-quarter enterprise customer additions. Management cited slower sales hiring and macro choppiness as factors impacting enterprise growth. However, the company has indicated plans to accelerate sales hiring in the fourth quarter, particularly for enterprise-focused roles. The recent expansion of Monday.com's second-largest customer from 25,000 to 60,000 seats demonstrates continued potential in large enterprise accounts.

Product expansion continues to be a key growth driver. Its monday service offering is expected to launch broadly by early 2025 after showing promising adoption in beta, with more than half of paying customers coming from cross-selling to existing customers. Additionally, monday CRM has maintained strong growth with accounts reaching 24,735 in the third quarter, up 124% year over year.

Artificial intelligence capabilities have gained significant traction, with AI actions on the platform increasing more than 250% quarter over quarter in the third quarter. While monetization of AI features is not expected to materially impact fourth-quarter results, the growing adoption could support future expansion opportunities. Operating efficiency remains in focus, with the company guiding for fourth-quarter non-GAAP operating income between $29 million and $31 million (11-12% margin), and free cash flow of $63-$66 million (24-25% margin). Recent leadership changes, including the appointment of new COO Adi Dar and the upcoming departure of CRO Yoni Osherov, may influence near-term execution.

Looking ahead, analysts will likely focus on several key metrics, including net dollar retention rates (111% in the third quarter), enterprise customer additions, and progress in cross-selling newer products like monday service. The company's ability to maintain growth while navigating leadership transitions and macro challenges will be important themes for fourth-quarter results.

MNDY Price Performance & Stock Valuation

Monday.com shares have gained 25.1% in the trailing six-month period compared with the Zacks Internet - Software industry’s appreciation of 44.3%. MNDY shares have also underperformed its industry peer, BILL Holdings BILL, which has surged 117.7% over the trailing six months.

The company is likely to have faced some potential headwinds in the fiscal fourth quarter, including ongoing macro uncertainty affecting enterprise spending and sales cycles. Management noted continued "choppiness" in certain market segments during the third quarter. Additionally, the company's developer-focused product (monday dev) has shown slower-than-expected growth, though steps have been taken to refocus the go-to-market strategy.

The company faces stiff competition from tech giants like Asana ASAN and Atlassian TEAM. These companies are making strong efforts to offer project and work management solutions, including the application of processes, methods, skills and knowledge to achieve specific objectives.

1-Year Performance

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We point out that MNDY stock is not so cheap, as the Value Score of F suggests a stretched valuation at this moment. In terms of the 3-Year forward 12-month Price/Sales, MNDY is trading at 10.02X, higher than the industry’s 3.29X.

MNDY’s P/S F12M Ratio Depicts Stretched Valuation

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Investment Considerations: Balancing Risk and Reward

While Monday.com has demonstrated strong revenue growth and product innovation, several near-term headwinds suggest a cautious Hold stance ahead of fourth-quarter earnings. The combination of sales team restructuring with the CRO's departure, slower enterprise customer additions in the third quarter, underperformance in the monday dev segment, and broader macro uncertainty could pressure near-term results and guidance. Although long-term opportunities remain attractive with AI integration, product expansion and enterprise penetration, the current valuation may not fully reflect execution risks during this transition period. Investors may benefit from waiting for clearer signs of enterprise momentum and successful leadership transition before adding exposure.

Final Thoughts

Despite Monday.com's strong product portfolio and AI momentum, the convergence of leadership changes, enterprise sales execution challenges, and macro uncertainties warrant a cautious stance ahead of fourth-quarter results. While long-term growth drivers remain intact, investors should seek better clarity on enterprise customer additions and successful navigation of the CRO transition before increasing positions.

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