MNDY - monday.com: Resilient Growth Amid Challenges

2024-03-20 02:20:32 ET

Summary

• I'm confident in monday.com's growth potential despite challenges like slowing revenue growth rates. monday.com is expected to have a 30% CAGR for revenue growth by 2024.
• MNDY has the potential to deliver $300 million in free cash flow by 2024, justifying its valuation.
• The stock valuation for monday.com is 35x forward free cash flows.
• With over 10% of its market cap in cash, paying 35x forward free cash flows seems reasonable to me.

Investment Thesis

monday.com ( MNDY ) points to solid guidance together with its Q4 2023 results .

Essentially, this is the bear and bull case. The bear case notes that monday.com is facing consistent deceleration in its revenue growth rates. While the bull case highlights that notwithstanding its decelerating revenues, the business is rapidly becoming increasingly profitable so that its valuation is cheaper than it appears at first glance....

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