Monday.com is the IBD Stock of the Day as the maker of project management software forges a new base. Monday.com stock has gained 31% in 2024, outperforming most software companies.
On the stock market today, Monday.com rose 2.3% to close at 248.98. Meanwhile, the iShares Expanded Tech-Software Sector exchange traded fund, an industry index, has gained 9% this year, boosted by a June rally.
The relative strength line of Monday.com stock is near 52-week highs.
Monday.com is forging a new mini double-bottom base right next to an earlier consolidation base. Also, the stock's entry point moves to 239.54 from its earlier consolidation entry of 239.22 on MarketSurge.
Founded in 2012, Monday.com competes with Asana, Smartsheet and Atlassian, among others.
Building Up Software Platform
William Blair analyst Arjun Bhatia says Monday.com has evolved into a platform company from a project management software maker. While Monday.com's software is most often used in project management, it's also used for customer relationship management, automating workflows, human resources, marketing and other business purposes.
"Increasingly, we are seeing investors recognize Monday for its breadth and true platform potential, which puts it in a unique breed of software companies," he said in a recent report. "The first product Monday built on top of its platform was project management, which is still over 90% of the company's annual recurring revenue."
"More recently, it has launched Monday CRM (customer relationship management) and Monday Dev, and will be launching Monday Service later this year," Bhatia went on to say. "We expect more products to be built on top of the platform in the future, which we believe can be done relatively easily and with few R&D resources."
In 2017, the software maker rebranded itself to Monday.com from its former name, Dapulse. Monday.com raised $574 million in its June 2021 initial public offering, with Monday stock priced at 155.
Monday.com Stock: Technical Ratings
Shares of Monday.com hold a superior IBD Composite Rating of 97, according to IBD Stock Checkup.
IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
Monday.com stock has an Accumulation/Distribution Rating of A-minus. This rating analyzes price and volume changes in a stock over the past 13 weeks of trading. The current rating of Monday.com stock indicates more funds are buying than selling.
The rating, on an A+ to E scale, measures institutional buying and selling in a stock. A+ signifies heavy institutional buying; E means heavy selling. Think of the C grade as neutral.
Monday.com Earnings Top Views
For the quarter ending March 31, Monday.com reported a profit of 61 cents a share on an adjusted basis, up 335% from a year earlier. Also, revenue rose 34% to $216.9 million.
Analysts had predicted adjusted profit of 40 cents per share on revenue of $210.5 million. For the current quarter ending in June, Monday.com predicted revenue of $228 million vs. estimates of $225.2 million.
With "no-code" software tools, customers build applications tailored to their needs. Further, customers create custom apps using prebuilt, graphical, drag-and-drop programming tools instead of coded language.
Monday.com Stock: Building Up The Brand
In addition, Israel-headquartered Monday.com enables customers to integrate third-party software into custom app development. Monday.com integrates software from Salesforce, HubSpot and many others.
Further, Monday.com continues to build up brand awareness vs. rivals. Its marketing strategy spans Facebook and Instagram, internet search engine optimization, online video advertising on YouTube, podcasts and plain-old billboard campaigns.
Monday's marketing aims to drive potential customers to its website, where they can download its software for a trial period. Further, Monday.com generates most of its revenue from subscription plans.
The self-service business model for Monday.com stock has worked well with small and midsize businesses. Also, Monday.com in mid-2018 launched a direct sales strategy. It stepped up hiring of salespeople to expand into the enterprise market.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
