Monday.com: KeyBanc 'back on the growth train'
Investing.com -- KeyBanc Capital Markets upgraded Monday.com to Overweight from Sector Weight on Tuesday, reversing its prior cautious stance after the company’s 4Q24 earnings report.
The firm also reintroduced a price target of $420, citing stronger-than-expected growth guidance for 2025.
“We were notably worried about Monday.com's 2025 guidance heading into the quarter and fully own that we had it wrong,” analysts wrote.
They had initially expected a disappointing outlook but now believe the company’s forecast is “plenty achievable” with multiple areas of potential upside.
Monday.com provided 2025 revenue growth guidance of 26.5% at the mid-point on a constant currency basis, surpassing KeyBanc’s prior estimate of 26.2%.
“We felt that 24% on constant currency guidance would be good enough to lift the stock; 26.5% was hardly even on our radar,” the firm noted.
KeyBanc highlighted several factors supporting future growth, including increased sales rep productivity, headcount expansion, new product momentum, an improving macroeconomic environment for small and medium-sized businesses, and artificial intelligence initiatives.
While the company’s margin outlook was weaker than anticipated, KeyBanc suggested that it has become a secondary concern.
“Margins are indeed expected to contract below what consensus estimates had forecasted, but with the growth guidance, the 11-12% EBIT margin range isn't even a talking point,” analysts wrote.
KeyBanc concluded that its prior downgrade in December was overly cautious and reaffirmed confidence in Monday.com’s trajectory. “We are back on the Monday train with an upgrade to Overweight,” the firm stated, emphasizing its belief that growth concerns are now in the “rearview.”