Key Takeaways:
- The 2-Minute Valuation Model values Monday.com stock at $350 per share in 2 years.
- That’s a potential 21% upside from today’s price of $290 per share.
- MNDY stock is trading below its average P/E multiple in the last 12 months
- Monday.com is projected to grow EPS by 69% over the next 3 years.
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Valued at a significant premium to traditional software companies, Monday.com (MNDY) has established itself as a leading work operating system, transforming how teams manage workflows, projects, and tasks.
Despite recent market volatility affecting tech stocks, Monday.com continues to expand its user base and introduce new features that drive adoption across organizations of all sizes.
With MNDY stock now trading at $290 per share, Monday.com presents an interesting opportunity for investors looking to capitalize on the ongoing digital transformation of work management.
Let’s analyze whether the company’s growth prospects justify the premium valuation.
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What is the 2-Minute Valuation Model?
Three core factors drive a stock’s long-term value:
- Revenue Growth: How big the business becomes.
- Margins: How much the business earns in profit.
- Multiple: How much investors are willing to pay for a business’s earnings.
Our 2-Minute Valuation Model uses a simple formula to value stocks:
Expected Normalized EPS * Forward P/E ratio = Expected Share Price
Revenue growth and margins drive a company’s long-term normalized earnings per share (EPS), and investors can use a stock’s long-term average P/E multiple to get an idea of how the market values a company.
Why MNDY Stock Looks Undervalued
Forecast
Based on analyst estimates shown in the chart below, Monday.com is expected to achieve impressive earnings growth that might help to justify its already lofty valuation.
EPS is projected to grow from $3.50 in 2024 to $5.92 by 2027, a 69% total increase over three years.
This earnings growth for Monday.com stock is likely to be driven by:
- Enterprise customer expansion: Monday.com is successfully moving upmarket, securing larger contracts with enterprise clients.
- Product suite expansion: The company continues to broaden its platform capabilities beyond project management into CRM, marketing, and IT solutions.
- International growth: With less than half of revenue coming from outside the U.S., international markets represent a significant growth opportunity.
- Improving operational efficiency: As the company scales, it’s demonstrating improved operating leverage, contributing to margin expansion.
For our valuation, we’ll estimate that MNDY stock will reach $5 in EPS in 2027.
Check out Monday.com’s full analyst estimates (It’s free) >>>
Is MNDY Stock Undervalued Right Now?
Monday.com stock currently trades at around 77x forward earnings, below its 12-month historical average of 87x, as shown in the P/E chart.
While the stock’s valuation has moved lower in recent months, it continues to trade at a lofty multiple in May 2025.
For our valuation, we’ll use a relatively conservative forward P/E multiple of 70x, slightly below where the stock trades today, acknowledging the volatile macro environment.
Fair Value of Monday.com Stock
Using our 2-Minute Valuation Model and applying a conservative approach:
- Conservative 2027 EPS estimate: $5
- Conservative forward P/E multiple: 70x
Expected Normalized EPS ($5) * Forward P/E ratio (70x) = Expected Share Price ($350)
The 2-year expected MNDY stock price we would get from this valuation is $350 per share.
With Monday.com stock currently trading at around $290 per share, this implies a potential upside of 21% over the next two years or a 10% annualized return.
MNDY stock is likely to deliver average market returns at this price, given that the broader market’s average annual returns over the long term have been around 10%.
Remember, this is just a valuation exercise, and we don’t know for sure what the stock’s price will be in the future.
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What is the Target Price for MNDY Stock?
Analysts think that Monday.com stock could have a bit of upside today.
Analysts have an average price target of around $346 per share for MNDY stock, indicating they see about 19% upside today for Monday.com based on its current share price:
Some analysts see even greater upside, with price targets ranging as high as $450 per share, suggesting potential upside of over 50% from current levels.
This wide range of targets reflects the opportunity and uncertainty surrounding high-growth software companies like Monday.com.
Risks to Consider
Despite the bullish outlook, investors should be aware of several risks that could impact Monday.com’s growth trajectory:
- Valuation sensitivity: At 77x forward earnings, any disappointing growth figures could lead to significant multiple compression.
- Intensifying competition: The work management space is increasingly crowded, with players like Asana, Smartsheet, ClickUp, and Notion vying for market share.
- Economic sensitivity: Companies might reduce spending on SaaS tools or consolidate vendors in a challenging economic environment.
- Customer acquisition costs: As the company targets larger enterprises, sales cycles and customer acquisition costs could increase.
TIKR Takeaway
Monday.com presents an interesting proposition at its current valuation. While not cheap by traditional metrics, the stock’s price reflects the company’s strong growth trajectory and expanding market opportunity.
Monday.com’s ability to continually innovate its platform, move upmarket to larger customers, and improve operating efficiency suggests it could grow into and potentially exceed its current valuation.
The projected 21% return over two years, while modest compared to historical growth rates, represents a risk-adjusted opportunity for investors seeking exposure to the digital transformation of work management.
Is MNDY stock a buy over the next 24 months? Use TIKR to check the stock’s analyst price targets and growth forecasts to see if it is undervalued today.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
