Monday.com Earnings Loom With Stock (NASDAQ: MNDY) Outperforming

Monday.com's stock (NASDAQ: MNDY) is on the rise leading into its first-quarter 2025 earnings release this morning. The stock is up 6% at $295, driven by optimism surrounding trade talks, as well as the firm's growth trajectory and AI-driven product enhancements. With the stock up 20.43% through 2025 YTD, outperformance has almost become expected.

Analysts project Q1 2025 revenue of $275.96 million, representing a ~27% year-over-year increase, with adjusted earnings per share (EPS) expected to rise 14.8% to $0.70. These estimates reflect confidence in Monday.com’s ability to sustain momentum, with EPS estimates having been revised upward over the past month, signalling bullish sentiment.

Notably, the company has also beaten EPS estimates in each of the past four quarters, including a 38.46% surprise in Q4 2024.

Monday.com’s full-year 2025 guidance was for revenue of $1.21 billion (up 24.3% YoY) and adjusted EPS of $3.32. A critical driver of this growth is the rollout of AI Blocks, a suite of pre-built AI functions designed to automate tasks such as data categorization, sentiment analysis, and document summarization. By integrating AI directly into workflows, Monday.com aims to enhance user productivity and retention, particularly among enterprise clients.

The stock trades at a forward price-to-earnings (P/E) ratio of 82.61, significantly above the industry average of 25.98. However, its price/earnings-to-growth (PEG) ratio of 2.02 is slightly below the sector average of 2.2. MNDY's 50-day moving average ($258.56) crossed above its 200-day average ($264.10) in late April, a bullish technical signal. Additionally, the 14-day Relative Strength Index (RSI) of 68.08 indicates moderate buying pressure without overextension.

MNDY Outlook – Bull/Bear Case

While JPMorgan Chase & Co. lowered its price target from $400 to $350 last week, citing valuation concerns, other firms remain bullish. Tigress Financial raised its target to $450 (from $340), and Goldman Sachs increased its target to $400 (from $350), citing strong free cash flow generation and upside from AI adoption. The average 12-month price target stands at $343, implying significant perceived upside from the current price action.

Recent Product Launches

AI Blocks, launched in Q1 2025, enable users to automate repetitive tasks using natural language prompts. For example, the “Detect Sentiment” function analyzes customer feedback in real time, while “Extract Info from Files” streamlines data entry from PDFs and emails. Early adopters have reported 20–30% efficiency gains in project management workflows, according to internal case studies.

The full rollout of monday sales CRM and monday dev in Q1 2025 has broadened the platform’s appeal beyond traditional project management. These vertical-specific solutions contributed to a 48% YoY increase in customers with >$50k ARR in 2024, a trend expected to accelerate in 2025.

Macroeconomic and Competitive Pressures

While Monday.com’s revenue growth remains robust, rising interest rates and IT budget constraints could dampen enterprise spending in late 2025. Competitors like Notion and ClickUp are also investing heavily in AI, potentially eroding Monday.com’s first-mover advantage.

The company’s reliance on upselling existing customers (net revenue retention of >110%) leaves it vulnerable to churn if AI features fail to deliver measurable ROI. Additionally, integrating acquisitions like SafeSend (completed by Thomson Reuters in January 2025) could strain operational focus.

🟩 The Bull Case for NASDAQ: MNDY

• AI Innovation: Early adoption of AI Blocks is driving measurable productivity gains and customer retention.
• Enterprise Expansion: New leadership and vertical-specific solutions are accelerating large-client wins.
• Consistent Outperformance: Four consecutive quarters of EPS beats and robust revenue growth.
• Strong Guidance: Confident 2025 outlook with $1.21 billion revenue and $3.32 EPS targets.
• Technical Momentum: Positive moving average crossovers and stable volatility signal bullish sentiment.

🟥 The Bear Case for NASDAQ: MNDY

• Rich Valuation: Forward P/E of 82.61 is significantly higher than industry peers, raising concerns about sustainability.
• Macroeconomic Risks: Higher interest rates and constrained IT budgets could impact enterprise spending.
• Competitive Threats: Rivals are rapidly advancing their own AI capabilities, threatening Monday.com’s edge.
• Execution Risks: Heavy reliance on upselling and integration of new acquisitions may strain resources if not managed well.

Monday.com enters Q1 2025 earnings with strong momentum. While valuation multiples remain elevated, the company’s ability to consistently exceed revenue and EPS estimates justifies premium pricing. More of the same may be required to continue the current bullish path.