Bert used to be a darling of this board, not so much anymore. Yet, I still read his publicly published articles. He just published a rather favorable article on Monday.
For those not familiar with the company, they offer automation software in the “workflow management” space. If you are among the older cohort on this board and possibly lack familiarity with that term, yet have some old fashioned project management experience, the easiest was to think of it is an automated replacement for Gantt charts (or CPM, PERT, etc.) with the added features of automatically generating the insights that formerly had to be derived by an experienced project manager.
This space is not without competition. Atlassian, Smartsheet and Asana to name just a few of the better known publicly traded companies with workflow management tools. Be that as it may, it appears that Monday is winning a lot of bakeoffs, along with winning uncompeted bids.
But, there’s no need for me to paraphrase that which Bert says much better. For a more detailed discussion of Monday and why you might want to hold shares in this company, I suggest you read the linked article.
On a personal note, I bought Monday not too long ago with some reluctance. I don’t see their product offerings as mission critical (although any company requiring project management does indeed need some tool set). Nevertheless, the TAM is reported to be significant and growing at an astonishing pace. Like a lot of companies in the IT space, I believe this is a winner takes most market and Monday seems to be the emergent winner.
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Thanks for this posting.
ASAN and SMAR are also receiving good reaction from market this quarter.
I personally think that fear mongers / FUD artists have succeeded with this narrative of these products not being mission critical. If you ask the users they will say these products are integral to their daily working. Its like saying - email or slack is not mission critical because people can call other people on phone… yeah but no one in functioning business will want to cut off email or slack in today’s time. And so we see in success of these company’s continued growth… ofcourse everyone is slowing down in this macro but for those who already use it, these products are absolutely essential to conduct their business every day.
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Interesting that I just mentioned Monday as one of my two top confidence companies in another thread, and here comes Bert recommending it as a buy. (Bert is, after all, in the top 0.1%, or top one thousanth of all such analysts as rated by the people who rate such things, well worth subscribing to.) Here’s a brief bite from his article.
Saul
Summary
- Monday’s latest quarter was exceptionally strong with revenues, earnings and free cash flow margins far exceeding expected levels.
- Of more importance, unlike many other high growth IT companies, it raised guidance for both earnings and revenues.
· It is enjoying important market share gains as it pivots its sales effort to larger users.
· Unlike competitors Monday isn’t having to layoff empoyees to achieve improvements in non-GAAP operating margins.
· It has achieved notable early success in its strategy to leverage its workflow technology to penetrate adjacent market opportunities.
My conclusion is that Monday is winning the market share battle, that its strategy of penetrating adjacencies is achieving noticeable success, and the company is in the early stages of a pivot to achieving non-GAAP profitability and significant positive free cash flow margins.
I’m recommending the purchase of Monday shares. Monday is one of the larger companies in the workflow management space. It appears that it will become larger than both Atlassian and Asana in terms workflow management software revenues this year, while Smartsheet remains somewhat larger. While Monday is apparently gaining market share, it appears poised to start to generate meaningful positive free cash flow. But one of the additional investment pillars for the company, in my estimation, is that it has taken its core technology, and extended it beyond just workflow management into several high potential adjacencies. I think that it will continue to grow faster than its competitors, gain share and ramp profitability over the coming quarters.
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Thanks for sharing this article! Really interesting, since Monday seems to be one of the typically less covered stocks.
I’d just like to make a comment regarding Monday in relation to Atlassian, Asana, and Co.
Initially, my thoughts about Monday were also like, hey, it is another project tool. But after more research I think that Monday’s product offering goes way beyond that of a task/project management tool like Asana.
Monday offers an open platform designed to cover pretty much any use case. To make this offering more concrete, they provide specific solutions to specific problems, like their CRM, developer tool, or Marketing planning tool.
Asana, for instance, cannot really cover such diverse use cases holistically, in my opinion. At least I would not want to use it as a CRM. And I think it cannot compete to Monday’s out-of-the-box integrations and automation workflows, either.
So while I cannot really imagine investing in Asana, I am actually invested in Monday as I see a lot of expansion potential, once they are used in one department, others might follow so they can collaborate on one main work OS tool with a more streamlined data foundation.
I hope this adds some helpful ideas towards their product offering being somewhat different from the classic task/project management tools out there.
Best
Lisa
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