What I did: I sold 25% of my Monday position, adding equal amounts to both Crowdstrike and Bill.com
Why I did it:
I expect decreased YoY revenue growth, maintaining 15% QoQ
Monday is the market leader in Work Automation (70% of sales in the non-tech sectors), has profitable cash flow margin of 10% with 90% NonGAAP Gross Margins and is likely growing Revenue at greater than 70% YoY in Q1; but, Management stated in Q4 CC, “We are frontloading expenses in Q1 to drive the growth”, increase partner channel, generate leads, aggressively hiring sales people.”
I won’t be phased when they report decreased FCF and increased Expenses. I am not however confident in how much over 70% Revenue growth I can expect.
Despite the weak guide from Q4:
I just don’t see a company I want to own more than the allocations I currently have. If Monday.com share price drops below $100 I might buy more, depending on the Recenue growth being above 80% or not.
Cloudflare 14% (I expect Cloudflare to continue to perform near Zscaler growth levels in the Security space. And Cloudflare has set up well their next s-Curve, third act.)