Has Wall Street Got Monday.com Completely Wrong?

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Few stocks have taken as brutal a beating from AI disruption fears as Monday.com (NASDAQ: MNDY). Its shares have fallen over 70% from last year's high and are currently trading below $80.

The fear behind that collapse, and that of many of Monday’s software peers, has been well covered. Investors worry that AI coding tools now make it easy for any company to build its own workflow platform in-house, rather than paying for a software subscription. But as we've seen with other software names in recent months, that fear has rarely matched reality as neatly as the charts would suggest.

The market seems to be picking up on this, too, as Monday’s stock has been quietly forming a base since February and has gained 30% since April.

In fact, there's a real argument that Monday’s own push into agentic AI could turn this into one of the more attractive entry points in software right now.

Why the Core Business Isn’t Actually Broken

Let’s start with the numbers, because that’s where the most obvious discrepancy lies between how the business has been performing and what the stock has been doing. In its most recent report, Monday’s revenue grew 24% year-over-year, while operating profit hit a record.

Full-year guidance for revenue and margins was also increased, while the customer data was even more telling, with gross retention hitting record highs, and the company’s enterprise motion gaining fresh momentum. If AI coding tools were hollowing out demand for Monday's platform as the bears have feared, these metrics should all have been trending down.

The Agentic AI Pivot Is Well Underway

What makes the bull case so compelling right now is how concrete Monday’s ongoing AI transition actually is. In May, the company rebranded itself as an "AI work platform," which co-CEO Eran Zinman described as “the biggest change in the history of our company,” adding that they were “going all-in on the new vision.”

Monday’s latest pricing model backs that up. New customers are moving to a seats plus credits structure that ties what they pay directly to the AI-driven value they receive, meaning revenue can expand as AI agents take on more work without requiring additional seat purchases.

Existing customers can opt in too, and enterprise customers are receiving complimentary AI packages to drive adoption. That's a direct answer to the exact fear that's been crushing SaaS valuations across the sector: that AI would make the traditional per-seat pricing models obsolete.

Interestingly for investors, Monday’s shift to working with AI, rather than fighting it, is already starting to yield results. In its most recent quarter, management disclosed that AI pricing models contributed approximately 10% of net new annual recurring revenue, a figure that’s expected to grow substantially in the coming months and years. The fact that the stock is still trading at the same price it was when all this was reported in May only adds to the sense that we’re looking at a golden entry opportunity.

Further Reasons to Be Bullish

The company’s ongoing share repurchase program is another reason to be bullish, with more than $550 million currently being deployed to buy back shares. That kind of scale indicates that management believes the stock is badly mispriced relative to how the business is performing.

Recent analyst ratings like BTIG Research’s reiterated Buy rating last week, and its $105 price target, only add to the bullish case, while Monday’s current valuation is the cherry on top. Compared against a sky-high price-to-earnings (P/E) ratio of 413 last summer, Monday’s current PE ratio of 33 looks like a bargain.

Tying It All Together

The next big thing to watch for is Monday.com’s next earnings report in August. The updated numbers, and any associated guidance from management, will be an important test of whether Monday's AI monetization story is building momentum or stalling out.

At the moment, the market seems to be betting on the latter, which, for a stock that’s already down 75% in 12 months, is a dangerous place to be.

Monday has plenty of good things going for it, and many of its key metrics are trending in the right direction. Add in the fact that it's trading at a valuation that’s a fraction of what it was a year ago, while its own AI transformation goes from strength to strength, and you can’t help but feel this is a contrarian’s dream setup.

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