Baird has trimmed its rating on monday.com Ltd. (NASDAQ: MNDY), moving the stock from Outperform to Neutral and cutting the price target to $90 from $175. The action follows the company's latest quarterly report and forward guidance, which Baird says came in below Street expectations and included the withdrawal of previously stated 2027 targets.
The shares are trading at $77.63 and have fallen sharply in recent days, losing 23.68% over the last week.
Baird singled out the company’s guidance for fiscal 2026 as a primary driver of the downgrade. While lower-than-consensus revenue guidance had been anticipated by many analysts, Baird said the simultaneous reset in margins and the removal of 2027 targets were "negative surprises" for the market.
Operationally, monday.com continues to show strong gross profit margins, reported at 89.2%, and revenue growth of 26.75% year-over-year. Despite these headline metrics, Baird flagged execution risk across several internal areas - including the marketing funnel, the go-to-market approach, and product development - that could constrain near-term momentum.
The research note highlighted persistent weakness in paid search marketing, specifically pointing to Google as a channel where demand remains subdued. Baird suggested this weakness in acquisition channels contributes to uncertainty around revenue and margin trajectories.
In its commentary the firm added that sentiment toward the stock will likely "remain muted" while the company resets expectations, characterizing the equity as "a show-me story." That label underscores Baird’s view that improved execution and clearer targets will be necessary to restore investor confidence.
Independent analysis indicates the shares may be undervalued at current levels and that the company carries more cash than debt on its balance sheet, which could offer some downside protection as management addresses operational and go-to-market challenges.
Other analyst moves and company developments
Several other brokerages adjusted their views or price targets after the quarterly update and guidance revision.
- Loop Capital described the December quarter revenue gain as modest - a 1.5% increase - calling it "fine, but not great," and downgraded the rating from Buy to Hold with a price target of $80.
- Wolfe Research lowered its price target to $95 from $140 but kept an Outperform rating, pointing to a mixed quarter that included a $5 million topline beat offset by softer profitability.
- Needham reduced its price target to $125 from $250 while maintaining a Buy rating, citing the fourth-quarter results and disappointing guidance for fiscal 2026.
- Oppenheimer cut its target to $130 from $200, noting customer acquisition and revenue retention challenges.
- DA Davidson trimmed its target to $150 from $250, attributing the revision to longer sales cycles that pressure fiscal 2026 estimates.
Collectively, these adjustments reflect a cautious posture from sell-side analysts, who are reacting to the company’s mixed operational signals and the guidance reset.
What this means going forward
The combination of below-consensus 2026 guidance, the removal of 2027 targets, and a margin reset has prompted a re-evaluation of expectations among analysts and investors. While profitability metrics remain respectable on a gross margin basis and revenue continues to grow year-over-year, execution risks tied to marketing effectiveness, go-to-market strategy, and product roadmaps will be key to watch as the company attempts to reaccelerate demand and improve retention.
Given the balance-sheet position and the current valuation, the shares may have some buffer against downside, but restoring market sentiment will likely require clearer forward targets and demonstrable improvement in customer acquisition channels and margin dynamics.