Monday.com stock price target lowered to $257 at Cantor Fitzgerald

Cantor Fitzgerald lowered its price target for monday.com (MNDY) to $257 from $286, while maintaining an Overweight rating, citing valuation adjustments, anticipated gross margin compression from AI compute costs, SEO pressures, and longer sales cycles, despite acknowledging opportunities in cross-selling and AI solutions. This adjustment comes as MNDY's stock has declined nearly 27% in six months. The company projects a 500 basis point decrease in gross margin due to AI investments but expects a 1,000 basis point long-term operating margin increase from leverage, alongside a 2027 revenue target of $1.8 billion. Other analysts, including KeyBanc, Needham, and TD Cowen, also maintain generally positive ratings, though some have similarly adjusted price targets amid mixed Q2 results and strategic shifts.

Analysis

Cantor Fitzgerald has adjusted its outlook on monday.com (MNDY), reducing its price target to $257 from $286 while maintaining an Overweight rating. This revision reflects a lower valuation multiple of 8.0x CY26E EV/R, down from 9.0x, justified by several near-term headwinds. The company anticipates a significant 500 basis point decline in its gross margin from the current ~90% level due to rising AI-related compute costs. Additionally, analysts noted risks from SEO pressures related to Google Search, which accounts for approximately 10% of new Annual Recurring Revenue (ARR), and potentially longer sales cycles. This cautious stance is set against a backdrop of a nearly 27% stock price decline over the past six months and a 2027 revenue target of $1.8 billion that fell below some prior analyst projections. Despite these concerns, the underlying growth story remains robust, with last-twelve-months revenue growth at 30.24% and an estimated 20% growth in core Work Management ARR for Q2 2025. Furthermore, the company projects a long-term 1,000 basis point expansion in operating margin through sales and marketing leverage, suggesting a strategic trade-off of near-term gross margin for long-term profitability and AI integration. This mixed but fundamentally positive long-term view is echoed by other firms like KeyBanc, Needham, and TD Cowen, which have also maintained Buy or Overweight ratings despite some similar price target adjustments.

Key Decisions for Investors

• Investors should weigh the company's strong long-term growth potential, driven by AI adoption and operating leverage, against near-term headwinds including a 500 basis point gross margin compression and execution risks related to SEO reliance.
• Monitor upcoming financial reports for the trajectory of operating margins and management commentary on sales cycle length, as these will be key indicators of whether the company's strategic AI investments are successfully offsetting cost pressures and driving leverage.
• Given the stock's recent 27% decline and the cautious but still positive analyst ratings, current market prices may present an entry point for long-term investors, but they should be prepared for potential volatility as the market digests the near-term margin impact.