monday.com (MNDY) Stock Has Plunged 73% — Is It Finally a Buy?
monday.com (NASDAQ: MNDY) has been one of the more dramatic stories in the software space this year. The stock closed Wednesday at $73.97, down 48.4% year-to-date and a staggering 73.2% over the past 12 months. But in the last week, shares bounced 11%, and over the past month they’ve gained 9.3% — raising the question: is this a turnaround or just a dead cat bounce?
The company, known for its colorful work management platform, has seen its valuation get torn apart as growth stocks fell out of favor. But beneath the surface, the numbers tell a more complicated story.
Two Models, Two Signals
A discounted cash flow (DCF) analysis, using a two-stage free cash flow model, estimates monday.com’s intrinsic value at roughly $138.31 per share. Against the current price of $73.97, that implies a 46.5% discount — a textbook undervaluation signal. The model projects free cash flow growing from $312.9 million in the latest twelve months to $567.1 million by 2030, with further expansion through 2035.
But flip the page to the P/E ratio, and the picture flips. monday.com trades at 31.63x earnings, close to the peer average of 31.21x and the broader software industry average of 29.27x. However, Simply Wall St’s proprietary Fair Ratio — which factors in growth, margins, and risk — pegs a fair P/E at just 21.21x. That suggests the stock is actually overvalued on an earnings basis.
So which is it? The answer may depend on whether you believe in the company’s long-term cash flow story or its near-term earnings reality.
What Investors Are Saying
We spoke to a few market participants to get a sense of the sentiment.
Rachel Kim, a portfolio manager at a mid-cap growth fund in Chicago: “I’ve been watching monday.com for a while. The DCF model is compelling, but I’m cautious. The company is still burning cash on sales and marketing, and the competitive landscape is getting crowded with players like Asana and ClickUp. I’d need to see margin expansion before I jump in.”
Marcus Delgado, a retail investor and tech enthusiast in Austin: “Are you kidding me? The stock is down 73% and people are still arguing about P/E ratios? This is exactly how you miss the boat. The platform has sticky users, recurring revenue is solid, and the DCF says it’s half off. I’m buying more every week. The market is just panicking.”
Linda Osei, a financial analyst at a boutique research firm in New York: “I think the truth is somewhere in the middle. The DCF is based on assumptions that may or may not hold. If growth slows more than expected, that $138 fair value could shrink fast. The P/E warning is a yellow flag, not a red one. I’d wait for the next earnings report before making a move.”
Tom Harrison, a retired engineer and part-time trader in Florida: “Honestly, I’m tired of hearing about ‘fair value’ and ‘intrinsic worth.’ The stock went down because people sold. It’s that simple. If you think the company is still growing, buy. If not, sell. All these models just make you feel smart while you lose money.”
The Bottom Line
monday.com is at a crossroads. The DCF model screams bargain, while the P/E analysis whispers caution. For long-term investors with a high risk tolerance, the current price may represent an entry point. But for those who need near-term clarity, the mixed signals suggest waiting for more concrete evidence of a turnaround.
As always, do your own research and consider your own financial situation before making any investment decisions.
This article is for informational purposes only and does not constitute financial advice. Past performance is not indicative of future results.