Is Monday Stock Going to $128?

Year to date, shares of Monday.com (NASDAQ: MNDY) have fallen 46% to around $80 at the time of writing. The stock traded near $300 in July. But concerns that artificial intelligence (AI) agents could make it easier for companies to build their own internal workflow automation tools have pushed investors to rein in their growth expectations.

So is the sell-off justified? Most Wall Street analysts still rate the stock a buy, with an average near-term price target of $128, according to Yahoo! Finance. Let's take a closer look at Monday.com's business to see whether the stock is worth buying on the dip.

Image source: Getty Images.

Fourth-quarter earnings gave investors mixed signals

Monday.com reported strong results for 2025. Full-year revenue grew 27% year over year to $1.23 billion, and fourth-quarter revenue didn't show any meaningful weakening, with the top line increasing 25% over the year-ago quarter.

The company is not having trouble signing new enterprise deals. Importantly, it is seeing strong momentum among its largest clients. The number of paid customers with more than $500,000 in annualized recurring revenue (ARR) grew 74% year over year -- more than twice the rate of growth of customers with over $50,000 in ARR.

Management noted strong demand for its new AI products. Monday Vibe is the company's fastest-growing product, hitting $1 million in ARR. AI Agents, which is in beta, is also seeing strong customer interest. This shows that Monday could be positioned to benefit from the growing demand for agentic AI, rather than being replaced by it.

However, where the story falls apart is its forward guidance. Monday.com has consistently posted year-over-year quarterly revenue growth of more than 20% as a public company. But revenue is expected to decelerate to 18% to 19% in 2026.

More concerning is that management shied away from discussing their previous 2027 revenue target of reaching $1.8 billion. CFO Eliran Glazer cited the "evolving nature of the AI landscape and the choppiness in the no-touch demand environment," which puts a cloud of uncertainty over Monday.com's prospects.

Should you buy the stock?

A few years ago, Monday.com looked like a solid long-term growth story in workflow management software. But, as management acknowledged, AI is rapidly changing the competitive landscape. Enterprise demand is still strong, but small-business momentum appears to be the weak spot. Monday.com's recent performance is consistent with The Motley Fool's research, which shows that AI adoption has been strongest among larger companies.

It's tempting to look at the stock as undervalued. It's currently trading at just 2.3 times forward sales estimates -- down from a 3-year average multiple of 8.3. But it's difficult to call the stock a genuine bargain in an "evolving AI landscape" with soft forward guidance.

It's tempting to bargain-hunt after the fall, but these aren't the stable growth signals that would cause me to buy this stock right now. I wouldn't expect this stock to rebound to $100 anytime soon, let alone the average price target of $128. The software stocks I would focus on for potential buys are those that reported strong demand last quarter and still maintain a stable growth outlook for 2026.

John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Monday.com. The Motley Fool has a disclosure policy.