DA Davidson downgraded monday.com (MNDY (NASDAQ:MNDY)) to a Neutral rating (From Buy) but maintained their 12-month price target of $190.00 on the project management stock.
Earlier this month, during an analyst day, the company shared valuable updates regarding the advancements in MondayDB. The update significantly enhances Monday 's platform scalability, specifically catering to enterprise customers.
MNDY highlighted robust growth paths for their relatively new CRM and Dev products. Moreover, the company unveiled an upcoming product called Monday service, slated for launch in late 2024.
DA Davidson analysts believe monday has demonstrated rapid innovation and anticipates ongoing advancements that will introduce new applications and consequently increase the number of paid users across its customer base.
“We are impressed with the company’s steady path towards profitability with positive NonGAAP operating margins in three of the last four quarters.” Wrote DA Davidson analysts, noting that the company did so without needing to cut their workforce.
Starting in the second half of next year, monday plans to increase prices for new customers and gradually for existing customers at renewal. The last price increase was in 2019.
DA Davidson sees the price change as fair. Noting that even with the increased, monday still offers what is considered competitive pricing options.
Following MNDY’s 3Q results, management increased the revenue guidance for 2023 to $724 million, an approximately 40% increase compared to last year. They also highlighted a significant improvement of $95 million in Non-GAAP operating income to reach $48 million, reflecting approximately 7% margins.
Shares of MNDY are up 0.89% in mid-day trading on Wednesday.