Monday.com is the IBD Stock of the Day as the maker of project management software basks in a buy zone. Recent price hikes have boosted revenue for Monday.com stock, which has gained 31% in 2024.
On the stock market today, Monday.com fell 1.2% to close at 240.54.
From a traditional technical view, Monday.com holds an entry point of 239.22. Also, a 5% buy zone extends to 251.18.
The relative strength line of Monday.com stock is near 52-week highs. Monday.com stock rallied in May on better-than-expected first-quarter earnings.
Founded in 2012, Monday.com competes with Asana, Smartsheet and Atlassian, among others.
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 MNDY stock priced at 155.
Monday.com Stock: Technical Ratings
Further, MNDY stock holds a superior IBD Composite Rating of 96, 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 B+. This rating analyzes price and volume changes in a stock over the past 13 weeks of trading. The current rating of MNDY 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 $26.9 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.
Offering customers the ability to customize project management software for their needs is one of Monday.com's strengths, said JPMorgan analyst Pinjalim Bora in a recent report. Small and midsize businesses in particular take advantage of the feature, Bora added.
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
Israel-headquartered Monday.com enables customers to integrate third-party software into custom app development. Monday.com integrates software from Salesforce.com, HubSpot and many others.
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.
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. Monday.com generates most of its revenue from subscription plans.
Pushing Into Enterprise Market
The self-service business model 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.
Meanwhile, JPMorgan's Bora recently met with management.
"Relating to its ability to continue to add large deals, Monday noted that in the wake of a large 25,000 seat deal, it has 'a few interesting deals' in the pipeline," Bora said. "Additionally, the company characterized MondayDB as a 'big unlock' for enterprise customers due to its performance and scale."
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and 5G wireless.
