Loop Capital has downgraded monday.com Ltd. (NASDAQ: MNDY) from Buy to Hold and established a new price target of $80.00, modestly above the stocks prevailing share price of $77.63. The move reflects the firm's reassessment of the companys growth trajectory and near-term profitability profile after the December quarter.
In its note, Loop Capital analyst Mark Schappel characterized the quarter as "fine, but not great," particularly given that Q4 is typically a seasonally stronger period for software firms. Revenue topped consensus by only 1.5% a margin the firm described as "the smallest in some time" even as monday.com reported robust gross profit margins of 89.17%.
The downgrade centers on two interrelated concerns central to monday.coms expansion strategy: a moderation in upmarket momentum and slower-than-expected adoption of newer product offerings. Those dynamics were reflected in the companys outlook for fiscal 2026, which Loop Capital said landed "meaningfully below consensus," and in managements decision to suspend its prior $1.8 billion revenue target for 2027.
Loop Capital further highlighted that operating margins and free cash flow margins are projected to compress as the company pivots into what it describes as an "investment year" in 2026. The combination of tempered top-line momentum and the expectation of margin pressure prompted the firm to reduce its rating to Hold. The announcement coincided with a substantial market reaction: monday.com shares fell 21% following the downgrade.
Loop Capitals view is that growth is slowing into the mid- to upper-teens, and that there are no immediate, clear catalysts to reverse that trend. As a result, the firm said a Hold rating is the prudent course until the company demonstrates meaningful reacceleration of growth, clearer signs of margin recovery, and tangible contributions from its AI initiatives.
Other sell-side reactions to monday.coms results have been mixed. Wolfe Research lowered its price target to $95 after deeming the quarter mixed: a $5 million topline beat was accompanied by softer profitability, with operating margins at 13%. Needham cut its target to $125, noting largely in-line fourth-quarter results but disappointed guidance for fiscal 2026. Oppenheimer trimmed its target to $130, pointing to a softer outlook driven by challenges in customer acquisition and revenue retention. DA Davidson set a new target of $150, attributing its change to lengthening sales cycles that affected fiscal 2026 estimates.
Despite those target reductions, Wolfe Research and Oppenheimer continue to carry Outperform ratings, while Needham and DA Davidson remain at Buy. The range of new targets and maintained ratings underscores divergent analyst assessments of monday.coms ability to navigate the current slowdown and restore its previous growth cadence.
Implications
For investors focused on the enterprise software and broader technology sector, monday.coms action and the ensuing analyst responses highlight common near-term pressures: softer demand in the upmarket, slower adoption of nascent product lines, and the trade-off between investing for future growth and preserving current margins and free cash flow. The company's classification of 2026 as an investment year signals managements willingness to prioritize product and go-to-market investments at the expense of near-term profitability metrics.
Conclusion
Loop Capitals downgrade to Hold reflects an elevated level of caution until the company can show both revenue acceleration and an improvement in margin trends, together with demonstrable benefits from its AI initiatives. Meanwhile, the heterogeneous responses from other analysts illustrate the range of views on how quickly monday.com can address lengthening sales cycles and restore stronger revenue momentum.