monday.com (MNDY) Stock Forecast & Price Target

Monday.com has demonstrated substantial growth in its Annual Recurring Revenue (ARR) from its CRM, Development, and Service offerings, which increased to 9.4% of total ARR by 2Q25, up from 4.0% in 4Q23, indicating effective management execution and customer adoption. The company has also provided long-term guidance suggesting a significant improvement in EBIT margins to 20-25% by CY30, alongside projected adjusted Free Cash Flow (FCF) exceeding 30%, which supports a strong financial outlook. Furthermore, with ongoing enhancements in customer retention and growth in the fast-expanding Monday Service offering, alongside successful expansions into upmarket domains, Monday.com appears well-positioned to sustain robust growth trajectories.

Monday.com is facing significant challenges in customer acquisition and growth, with a decline in performance marketing's contribution to sales and a shift in focus towards larger enterprise accounts, leading to slower demand. The company's gross margin is expected to decline from 90% to 85-90% due to increasing AI-related expenses, which may further hinder profitability in the coming years. Additionally, external competitive pressures, particularly from established players like Microsoft, pose risks to Monday.com's market position as it struggles with longer sales cycles and a less favorable revenue growth outlook.