monday.com MNDY is facing mounting pressure as the work management platform grapples with deteriorating customer retention metrics that threaten its enterprise expansion strategy. Net Dollar Retention (NDR) slipped to 111% in the second quarter of fiscal 2025 from 112% in the first quarter. The Zacks Consensus Estimate pegs NDR at 110% for the third quarter, down 0.8% year over year, signaling continued weakness.
This trend poses risks to the company’s growth model. Nearly all of monday.com’s revenues come from subscriptions, making NDR a critical measure of future performance. The metric captures how much recurring revenue expands or contracts within the existing customer base, including upsells, cross-sells and churn. A sustained decline means weaker expansion dynamics across accounts, directly influencing the company’s ability to grow its top line.
The core platform, monday workOS, is designed to support a broad set of workflows spanning project management, sales, marketing and product development. The enterprise strategy relies on customers adopting more modules over time, not just renewing existing seats. Yet high-value cohorts above $50,000 and $100,000 in annual recurring revenues have stabilized rather than expanded, pointing to slower upselling and cross-workflow adoption, with enterprise sales cycles long and complex, softer retention limits visibility into sustainable growth.
Revenue expectations mirror this backdrop. The Zacks Consensus Estimate for third-quarter revenues is pegged at $312.06 million, implying growth of 24.33% year over year. This marks a slowdown from the second quarter’s 27% pace, signaling that weaker retention is beginning to weigh on overall momentum.
While customer acquisition challenges, including pressures from recent Google algorithm changes, add to the headwinds, retention remains the central concern for MNDY. Enterprise gains depend on deeper adoption within existing accounts, yet softer Net Dollar Retention signals that expansion momentum is slowing. With revenue growth already moderating, the persistence of weaker retention leaves uncertainty over MNDY’s ability to sustain its enterprise growth trajectory.
Competitive NDR Landscape Reveals monday.com's Vulnerability
Atlassian TEAM and Asana ASAN provide useful contrasts to monday.com in the Net Dollar Retention landscape. Atlassian has seen moderation in NDR but cushions risk through its wide portfolio spanning Jira, Confluence and Trello. Asana, meanwhile, has focused on large enterprise accounts, with retention supported by deep workflow integrations and expansion across multinational deployments. Compared with Atlassian and Asana, monday.com relies more narrowly on expansion within monday workOS accounts. This heavier dependence makes MNDY more vulnerable if retention softens further, underscoring the competitive pressures shaping enterprise growth paths.
MNDY’s Share Price Performance, Valuation and Estimates
MNDY shares have plunged 18.5% in the year-to-date (YTD) period, underperforming the Zacks Internet - Software industry and the Zacks Computer and Technology sector’s increase of 22.6% and 18.8%, respectively.
MNDY’s YTD Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, MNDY stock is currently trading at a forward 12-month Price/Sales ratio of 6.87X compared with the industry’s 5.82X. It has a Value Score of F.
MNDY's Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for MNDY’s third quarter 2025 earnings is pegged at 89 cents per share, which has been revised upward by three cents over the past 30 days. The estimate indicates 4.71% year-over-year growth.
monday.com Ltd. Price and Consensus
monday.com Ltd. price-consensus-chart | monday.com Ltd. Quote
monday.com currently carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
One Big Gain, Every Trading Day
To help you take full advantage of this market, you’re invited to access every stock recommendation in all our private portfolios - for just $1.
Zacks private portfolio services that closed 256 double and triple-digit winners in 2024 alone. That’s about one big gain every day the market was open. Of course, not all our picks are winners, but members have seen recent gains as high as +627% +1,340%, and +1,708%.
Imagine how much you could profit with a steady stream of real-time picks from all our services that cover a number of strategies to suit a variety of investing and trading styles.
See Stocks Now >>Atlassian Corporation PLC (TEAM) : Free Stock Analysis Report
Asana, Inc. (ASAN) : Free Stock Analysis Report
monday.com Ltd. (MNDY) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
