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monday.com Slashed to Neutral at Citi, Shares Drop 8 percent

monday.com (NASDAQ:MNDY) shares dropped more than 8% intra-day today after Citi’s analysts downgraded the company to Neutral from Buy, adjusting their target price to $250 from $277. The analysts mentioned that recent discussions with partners and an analysis of web traffic suggest a slowdown in demand, potentially dimming the near-term outlook despite high investor expectations and valuation. While monday.com is still considered a leading contender in terms of new product development, particularly in CRM, and marketing efficiency, the anticipated boost from recent price hikes might not be as significant as previously expected.
The report noted a shift towards longer deal cycles and increased resistance to price adjustments, alongside a deceleration in user growth that might not be fully accounted for in the current valuation. Having outperformed significantly over the last year, monday.com’s valuation is near its two-year peak, a level that may not fully reflect the cooling demand environment and heightened investor optimism regarding price increase impacts. The downgrade to Neutral reflects a recalibrated view of risk and reward, with expectations for the upcoming first-quarter earnings to potentially fall short of investor predictions due to the observed slowdown.

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