Monday.com (MNDY) has seen its stock price cut in half this year, falling 51% in 2025 and 44% over the past six months. The decline accelerated on July 22 after the company announced it would lay off 20% of its workforce as part of a strategic shift toward greater use of artificial intelligence (AI). The move has intensified debate among investors: is MNDY now a bargain, or is further downside ahead?
The SaaS Sell-Off: Why MNDY Is Falling
Monday.com is not alone in its struggles. The broader software-as-a-service (SaaS) sector has been under severe pressure in 2025, a trend some analysts have dubbed the “SaaSPocalypse.” Fears that AI tools could replace many traditional software functions have weighed on shares of companies like Adobe, ServiceNow, and Workday. The concern was amplified earlier this month when IBM reported that customers were prioritizing hardware spending over software, signaling a potential shift in enterprise budgets.
Monday.com’s own layoff announcement added to the gloom. While layoffs can sometimes signal management’s intent to streamline operations and boost profitability, they often raise questions about the company’s near-term outlook. In this case, the company said the job cuts are part of a broader push to integrate AI more deeply into its platform.
Business Fundamentals Remain Solid
Despite the stock’s sharp decline, Monday.com’s underlying business continues to show strength. In its most recent quarter, revenue rose 24% year over year to $351 million. The number of customers paying more than $50,000 annually increased 32%, while those spending over $100,000 grew to 1,844 from 1,328 a year earlier. The company is also transitioning to a consumption-based pricing model—seats plus credits—which management believes will support sustained growth.
Operating income reached $49 million in the quarter, and analysts expect revenue to rise 18.9% in the second quarter to $355 million, followed by 17% growth in the third quarter to $370 million. For the full year, the consensus estimate calls for revenue of $1.47 billion, up 19%.
For context on the broader SaaS valuation reset, see our analysis: NOW, CRM, WDAY, ADBE: Are These SaaS Stocks Bargains After Valuation Reset?
Valuation: Cheap Relative to the Market
One of the most compelling arguments for MNDY as a potential bargain is its valuation. The stock now trades at a forward price-to-earnings (P/E) ratio of 16, which is below the S&P 500’s multiple of 20. For a company still growing revenue at nearly 20% annually, that discount has caught the attention of value-oriented investors.
However, the stock’s trajectory has been volatile. After peaking at $342 in February 2024, MNDY fell to a low of $58 in April 2025. It has since bounced but remains well below its highs. The stock has also exhibited a pattern of gapping lower after earnings reports, adding to investor uncertainty.
Technical Picture: Island Reversal Suggests Potential Bounce
From a technical standpoint, the weekly chart shows MNDY has formed an island reversal pattern—a formation that can signal a trend change. The stock is currently testing a key support level near its 2022 lows. If the pattern holds, a rebound toward $100 could be in play. Conversely, a break below the year-to-date low of $58 would point to further downside.
For investors looking at the broader tech landscape, the recent sell-off in high-growth names has created opportunities elsewhere. For example, Scottish Mortgage Trust Rallies 8.5% as SpaceX Rebound and Bargain Tech Stocks Boost Portfolio highlights how some funds are capitalizing on the dip.
Risks to Consider
While the valuation and technical setup may appear attractive, risks remain. The SaaS sector faces ongoing disruption from AI, and Monday.com’s reliance on enterprise customers means it is exposed to any slowdown in corporate IT spending. Additionally, the layoffs could signal that management anticipates a tougher operating environment ahead.
As the market digests these developments, the coming earnings report will be critical. If Monday.com can deliver strong results and reaffirm its growth trajectory, the stock could stage a recovery. If not, the sell-off may have further to run.
This article is for informational purposes only and does not constitute financial advice.
