DA Davidson downgrades monday.com ahead of Q4 results
TU IS

Investment firm D.A. Davidson downgraded cloud computing company monday.com (NASDAQ:MNDY) ahead of its fourth-quarter results next week, citing worries over the magnitude of the results. 
"Our analysis of 3rd party data points to a smaller beat than usual, and competitor commentary/results point in a similar direction," analyst Robert Simmons wrote in a note to clients, specifically calling out results from Atlassian (TEAM).
Simmons lowered his rating on Israeli-based monday.com (MNDY) to neutral and lowered estimates for the fourth-quarter and next two years.
Monday.com (MNDY) shares fell nearly 3% in premarket trading on Friday.
The analyst pointed out that revenue "beats" compared to guidance have slipped over the past five quarters: 11.4%, 9.2%, 7.4%, 4.8% and 4.9% and with continued foreign exchange headwinds likely a factor, it's possible the beat could be even smaller this time around.
A consensus of analysts expect monday.com to lose an adjusted 38 cents per share on $141.28M in revenue.
Looking to the first-quarter, Simmons believes monday.com (MNDY) management will err on the cautious side, but it's possible that foreign exchange could be a tailwind and help guidance come in around $152.3M, or slightly above consensus.
Last month, Citi named monday.com (MNDY) as one of its top application software stocks for 2023, despite the slowing macro environment.
Analysts are overwhelmingly positive on monday.com (MNDY). It has a BUY rating from Seeking Alpha authors, while Wall Street analysts rate it a STRONG BUY. Conversely, Seeking Alpha's quant system, which consistently beats the market, rates MNDY a STRONG BUY.