monday.com (MNDY) Stock Forecast & Price Target

Monday.com has demonstrated significant growth in its recurring revenue streams, specifically with CRM, Dev, and Service offerings accounting for 9.4% of annual recurring revenue (ARR) as of Q2 2025, up from 4.0% in Q4 2023, which indicates the company's ability to exceed its previous targets. The company has provided long-term guidance for EBIT margins of 20-25% by circa 2030, a substantial increase from the expected 13% EBIT margin for 2025, highlighting an improving profitability trend. Additionally, the company's focus on customer retention and growth initiatives, including an increasing adoption of the monday.com Service and successful expansion into upmarket segments, positions it well for continued revenue growth and operational scaling in the future.

Monday.com is facing significant challenges with a notable decline in performance marketing as a percentage of total sales and marketing expenses, which has dropped from 60% in Q1 2021 to 33% in Q2 2025. Additionally, the company anticipates a decrease in gross margins from 90% to a range of 85-90% over the coming years due to rising AI-related expenses, combined with a persistent slowdown in expected year-over-year revenue growth, which is now projected to be below previous guidance levels. The competitive pressure posed by established players like Microsoft, coupled with the impact of changing customer acquisition strategies and longer sales cycles, contributes to a weakened outlook for Monday.com’s stock performance.