Monday.com Earnings Preview: Can AI Investment Reverse the Gloom of Slowing Growth?

Eastern time, May 11, 2026, pre-market, Monday.com is expected to release its first-quarter financial report. Against the backdrop of the previous February's guidance that shook its stock prices and intense competition in the collaboration software race, the focus of this report is on AI product transformation, customer acquisition efficiency in the SME segment, and profitability performance. It tests the company's ability to rebuild market confidence under the expectation of growth deceleration.

Macro Background: Industry Valuation Remodeled, Billing Model Faces Challenges

The collaboration software track is facing a broad reassessment of valuations, with the traditional seat-based billing model being challenged by the increase in AI productivity. As AI automation reduces the demand for human seats in enterprises, investors are beginning to question whether SaaS companies can maintain their current pricing structures. The macro environment in the second quarter remains volatile, with foreign exchange headwinds and tightening corporate spending continuing to suppress the software industry. Monday.com not only needs to deal with the deceleration of growth but also needs to prove in the increasingly competitive red ocean market that its AI transformation is not merely a defensive investment.

Institutional Views: Concentrated Lowering of Target Prices, Consensus Tends to a Defensive Stance

Analysts expect the company's adjusted earnings per share for the first quarter to be 0.96, a decline of approximately 13% year-over-year. Revenues are expected to be $339.3 million, a year-over-year increase of about 20%, but sequential growth may be maintained at around 1.6%.

Mainstream institutions have shown a clear cautious attitude before this financial report, with several major banks lowering their target prices in April.

Barclays analyst Raimo Lenschow lowered the target price from $115 to $95 as part of the defensive lowering of target prices for the software sector during the Q1 financial report. Piper Sandler has downgraded the stock rating to neutral, with a target price set at $85, arguing that cutting-edge AI models compete upwardly with corporate software budgets, and the terminal valuation of the collaboration track needs to be reevaluated. Guggenheim lowered the target price to around $130 but maintained a "buy" rating.

Four Core Observation Points

The customer acquisition efficiency of performance marketing channels: The market is highly focused on whether the cost of acquiring SME customers stabilizes and whether the previously mentioned weakness in contactless channels has improved.

The revenue contribution of AI products: The current annual recurring revenue of the AI tool, Monday Vibe, is only around $1 million, and investors are eager to see evidence of AI technology translating into substantial revenue growth.

Profit margins and operational efficiency: In the face of the company's forecasted compression of profit margins, the management's ability to control cost expenditures will determine its resistance limit.

The resilience of seat pricing models: Pay attention to the company's description of pricing strategies in the AI environment during the earnings conference call and how to offset the potential decrease in seat demand caused by the widespread adoption of AI.

Risks and Valuation Outlook

The company currently faces three core risks. The first is that if AI products cannot be monetized quickly, high R&D expenses will continue to drag down profits. The second is an unexpected loss rate of SME customers. The third is if the revenue target for 2027 is further revised down, it may trigger a new round of institutional selling.

At the valuation level, the company's stock price has fallen more than 70% from its 52-week high, and the current P/E ratio is at a historical low. If the financial report shows better-than-expected AI transformation or recovery in customer acquisition efficiency, the stock could rebound from its overselling. On the contrary, if the growth guidance is disappointing again, the stock price may fall below the support level of $70.