Why Monday.com Stock Crashed Today, Erasing a Recent Surge – Motley Fool

Returns as of 11/11/2021
Returns as of 11/11/2021
Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.
Anders Bylund is a Foolish Technology and Entertainment Specialist. Where the two markets intersect, you’ll find his wheelhouse. He has been an official Fool since 2006 but a jester all his life.
Hypoallergenic. Contains six flavors not found in nature. Believes in coyotes and time as an abstract.
We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.
Follow Anders on Twitter, LinkedIn, and Google+.
Shares of Monday.com (NASDAQ:MNDY) are having a bad case of the Mondays this fine Wednesday. The stock fell as much as 21.2% in the morning, lingering at a slightly milder 18.5% loss as of 12:30 p.m. EST. The company posted robust third-quarter results early in the morning, but the analyst-stumping report wasn’t enough to sustain Monday’s surging share prices.
Monday provides software-as-a-service (SaaS) tools that help companies both large and small build and manage their digital business needs, ranging from customer relations to building mobile apps.
Third-quarter revenue surged 95% above the year-ago reading, landing at $83 million. Adjusted net losses stopped at $0.26 per share, compared to a loss of $0.81 per share in the third quarter of 2020. Analysts had expected a loss of roughly $0.60 per share on top-line sales near $74.7 million.
Monday’s management also provided revenue guidance far ahead of the current Street view for the fourth quarter. The company is experiencing strong customer loyalty while its footprint in the enterprise-scale market more than tripled from the year-ago reading.
Image source: Getty Images.
It’s quite rare to see a sharply negative price change for companies that just reported results way above Wall Street’s expectations, but this move needs some context. The company’s equally impressive second-quarter report triggered a massive share price gain that worked out to 71% for the month of August, and investors were champing at the bit to catch the next massive surge. So the stock rose 26.8% on enormous trading volumes in the two days leading up to this report. Under these circumstances, it would have taken a record-breaking home run of a report to live up to the market’s impossibly high expectations.
So the stock has retreated to prices last seen on Monday morning. Monday still trades at sky-high valuation ratios such as 70 times trailing sales and 21 times the company’s book value. That’s a much safer point of entry than the speculative price spike of the last couple of days.

Discounted offers are only available to new members. Stock Advisor will renew at the then current list price. Stock Advisor list price is $199 per year.
Stock Advisor launched in February of 2002. Returns as of 11/11/2021.
Average returns of all recommendations since inception. Cost basis and return based on previous market day close.
Making the world smarter, happier, and richer.

Market data powered by Xignite.

source

Leave a Reply

Your email address will not be published. Required fields are marked *