Monday.com (MNDY) shares look appealing at current levels, and the stock is expected to start outperforming in early 2026 as Wall Street earnings estimates move higher, Morgan Stanley said Tuesday in a report.

The company's growth should remain resilient, supported by steady demand from larger customers, with accounts generating more than $50,000 in annual recurring revenue making up 41% of total revenue, the report said. Sales in Q4 from customers using multiple products rose 74% from a year earlier, and the core Work OS business grew 21%, Morgan Stanley said.

AI remains a key upside driver, helped by the rapid development of monday.com's Vibe product, early use of its AI tools, and plans to introduce paid AI agents in H1, the report said.

While management issued softer 2026 revenue, margin, and cash-flow guidance, expectations have now reset, creating a more attractive backdrop supported by durable enterprise demand and a broader AI product lineup, the report said.

Morgan Stanley slashed its price target on monday.com stock to $115 from $200 and maintained its overweight rating.

Monday.com shares fell 6.1% in Wednesday trading.

Price: 69.61, Change: -4.50, Percent Change: -6.07