Monday.com (NASDAQ: MNDY) can hit new all-time highs this year because it capitalizes on AI and business automation like every other technology company would be happy to accomplish. It is growing its user base, deepening penetration of services, and doing so among the world’s largest businesses.
The growth is robust, profitable, and self-funded, which is a critical factor. Monday.com has one of the healthiest balance sheets of any traded company, let alone its tech brethren, who are often plagued with debt. The takeaway is that this company's business and shareholder value are good, and the value growth is accelerating.
Monday.com Wows Market With Results and 2025 Guidance
Monday.com had a strong quarter, with revenue growing by 32.3% to $268 million, outpacing MarketBeat’s reported consensus by 250 basis points. The strength was driven by client growth and penetration, with large clients (those contributing more than $50K and $100K in ARR) growing by 39% and 45%. Net retention, a measure of penetration, is up 112% across the system and 116% among the most significant clients, aided by new product launches.
Margin is another area of strength. The company’s revenue growth and operational discipline provided significant leverage and drove a 500 basis point improvement in the adjusted operating margin. The adjusted EPS grew by 66% despite the increased share count, which set a record along with operating income and free cash flow. The share count is rising due to share-based compensation, but only incrementally. The pace of dilution may slow in 2025 due to the rapidly improving cash flow and financial position, and could even be reversed, which would be a significant catalyst for the market.
The guidance is equally good. The company expects another quarter of solid, double-digit top-line growth and healthy margins in Q1 and 2025. The critical detail is that the midpoints of the revenue and earnings ranges are above the consensus estimates and likely cautious, given the trends. In this scenario, investors might expect outperformance and improving guidance in the coming quarters.
Monday.com’s Enviable Balance Sheet Helps Drive Growth
Monday.com has an enviable balance sheet with ample cash, cash and equivalents rising, current assets up in all categories, and total assets increasing by 32% in 2025. Liability remains low, the company has no long-term debt, and total leverage is less than 0.7x equity. Equity, the measure of shareholder value, rose by 27% in 2024 and will likely increase by another double-digit figure in 2025. The company plans to lean harder into AI and produce product advancements and new products to attract clients and improve penetration.
The balance sheet and growth outlook are central to the bullish analysts' sentiment trends. Those include increasing coverage, firming sentiment, and a rising price target. The price target lags the market but is up 50% in the 12 months leading into the Q4 release, with revisions leading to the high-end range. The opportunity now is for analysts to continue to lift their price targets and lead the market even higher. As it is, the high-end range at the time of the release is near $350, a three-and-a-half-year high when reached.
The Technical Outlook: Monday.com Cross Critical Resistance Point
MNDY's share price surged 30% following the Q4 release and will likely increase further because it crossed a critical resistance point. That point is near a price-shoulder set in 2022 that was confirmed as resistance late in 2024. The move to new highs is significant and shows a shift in market sentiment, with sights set on the current highs. There is potential for resistance at $350 and $400, but they are unlikely to keep the market from advancing without a change in the outlook.
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