Key Stats for Monday.com Stock
- Price change for Monday.com stock: -21%
- $MNDY Share Price as of Feb. 9: $78
- 52-Week High: $335
- $MNDY Stock Price Target: $168
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What Happened?
Monday.com (MNDY) stock crashed over 21% on Monday after the project management software company gave investors a reality check with its 2026 outlook.
The Israel-based company is now facing two major challenges: slowing growth and mounting fears that AI could disrupt its entire business model.
- Monday.com projected revenue between $338 million and $340 million for the current quarter. That’s below the $343 million analysts were expecting.
- For the full year, the company forecasted revenue between $1.452 billion and $1.462 billion, missing the $1.48 billion consensus estimate.
- The guidance disappointment gets worse when you look at profitability. Monday.com expects operating income of just $165 million to $175 million for the year.
- Analysts had penciled in $220 million. That’s a significant gap, suggesting the company is facing significant margin pressure.
The stock selloff has been brutal. MNDY stock has now lost about half its value so far this year. The company has shed over three-quarters of its market cap from its November 2021 peak.
It’s part of a broader rout in software stocks, with the iShares Expanded Tech-Software Sector ETF plunging 22% year-to-date.
What’s driving the weakness?
Management cited several factors during the earnings call.
- First, there’s ongoing choppiness in the small business market. The company’s “no-touch” self-serve channel has been struggling, and management doesn’t expect that to improve in 2026.
- Second, foreign exchange headwinds are crushing margins. With 55% of its workforce in Israel, the recent 20% appreciation of the Israeli shekel against the dollar is eating into profits. Management said FX is creating a 100- to 200-basis-point drag on operating margins.
- Third, and most concerning, is the broader AI disruption fear gripping the software sector. Investors are concerned that new AI tools and agents could replace traditional software products, such as Monday.com’s project management platform.
To be fair, Monday.com did beat on the top and bottom line for the fourth quarter. The company reported earnings of $1.04 per share, beating the $0.92 consensus. Revenue grew 25% year-over-year to $334 million, above the $330 million estimate.
But investors aren’t focused on what happened last quarter. They’re worried about what’s coming next.
See analysts’ growth forecasts and price targets for MNDY stock (It’s free!) >>>
What the Market Is Telling Us About MNDY Stock
The market’s brutal reaction to MNDY stock shows that investors have lost confidence in the company’s growth story. Slowing to 18-19% revenue growth in 2026 from 27% in 2025 is a major deceleration, especially for a company that was supposed to be in a high-growth phase.
Management sought to reassure investors about AI disruption during the earnings call. Co-CEO Eran Zinman insisted the company isn’t seeing competitive pressure from AI companies.
“We don’t see any impact currently from any AI company, and we’re shifting our product, regardless, to be more AI native,” he said.
The company is rolling out new AI features, including agents, workflows, and a product called Monday Vibe, which lets customers build applications on top of their data. Management highlighted that Monday Vibe became the fastest product in the company’s history to surpass $1 million in ARR.
But here’s the problem: investors aren’t convinced these AI features can offset the broader headwinds.
Monday.com admitted it’s struggling to acquire and retain small business customers. The cost to acquire self-serve customers has gone up, and returns on those investments are below historical levels.
That’s a major red flag. It suggests the market is getting more competitive and customers are finding alternatives, whether that’s other software tools or potentially AI-powered solutions they can build themselves.
Management also dropped its 2027 revenue target entirely. On the last earnings call, CFO Eliran Glazer had said the company felt confident about hitting $1.5 billion in 2026 revenue. Now they’re guiding to $1.45-1.46 billion and won’t even discuss 2027.
When asked directly what changed, Glazer cited “noise in the market” and said the no-touch business “didn’t see the improvement that we hoped for.” He admitted the company is experiencing a “shift in the business” that takes time to work through.
That’s corporate-speak for “we’re struggling more than we expected.”
The one bright spot is the enterprise business.
- Monday.com is having success moving upmarket, with customers paying over $50,000 annually, now representing 41% of total ARR.
- Gross retention in this segment hit 91%, the highest level in company history. Renewal rates are in the high 90s.
But that upmarket shift comes with costs. Monday.com is investing heavily in sales and R&D to support larger enterprise deals. Those investments hit margins before they drive revenue growth, which explains part of the profit squeeze.
For MNDY stock investors, the fundamental question is whether Monday.com can successfully pivot from a self-serve SMB growth story to an enterprise platform while fending off AI disruption. Right now, the market isn’t buying it.
The stock’s 50% decline this year reflects deep skepticism about both the near-term growth trajectory and the long-term competitive position in an AI-driven world.
Until management can show concrete evidence that its AI strategy is working and enterprise momentum can offset SMB weakness, MNDY stock will likely remain under pressure.
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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!
