Monday.com (NASDAQ: MNDY) has endured a brutal stretch in 2026, with shares falling more than 40% as AI-driven fears weigh heavily on the SaaS sector.
The work operating system company was caught up in a broader software-as-a-service selloff, and investors punished the stock hard in February after it projected Q1 2026 revenue would fall slightly short of analyst expectations.
When Monday.com reported its Q1 results in May, it beat those original revenue estimates by a wide margin, posting revenue of $342.9 million against a backdrop of persistent market skepticism.
Full Q1 revenue came in at $351.3 million, representing year-over-year growth of 24%, driven largely by expansion among its existing customer base.
The company’s net dollar retention rate stood at 110%, a figure that signals existing customers are spending more year over year after accounting for churn.
Among larger clients, retention was even stronger, reaching 114% for customers with more than 10 users and 116% for those with annual recurring revenue of $50,000 or more.
Monday.com also raised its full-year guidance, now projecting revenue of between $1.466 billion and $1.474 billion, up from prior guidance of $1.452 billion to $1.462 billion.
For Q2, the company forecast revenue of $338 million to $340 million, representing growth of 18% to 19% compared to the same period last year.
Despite those encouraging numbers, the stock remains down more than 70% over the past year, as investors continue to question whether AI will erode the core value proposition of visual workflow automation tools.
Monday.com’s platform is designed as a drag-and-drop interface that requires no technical expertise, giving organizations a simple way to automate workflow tasks without dedicated engineering resources.
The company has responded to AI pressure by launching its own tools, including AI agents and a vibe coding product called Monday Vibe, which has reportedly been performing well with customers.
At current prices, the stock trades at a price-to-sales ratio below 3 times and a forward price-to-earnings ratio below 19 times, a valuation that appears cheap for a company still projected to grow revenue by nearly 20%.
The central debate for investors is whether organizations will increasingly build their own workflow software using AI tools, or whether they will continue to value the security, compliance, maintenance, and updates that dedicated SaaS providers offer.
Organizations have always had the technical ability to develop their own software, and AI lowers that barrier further, but the true cost and risk of in-house development remains a meaningful consideration for most businesses.
For investors willing to take a view on the durability of the SaaS model, Monday.com’s depressed valuation relative to its growth profile presents a compelling case for consideration at current levels.
