“There is no connection between market sentiment and monday’s actual situation”: Founders push back despite stock rout
CEOs project confidence even as shares tumble more than 45% in 2026.
Question marks have hovered over monday.com for the past year. Although 2025 was a record year for the enterprise software company by every measure, investors have increasingly questioned its ability to sustain long-term growth given the profound disruption that AI is bringing to the software market. AI agents and “vibe coding” solutions pose a real threat to the software-as-a-service (SaaS) model on which enterprise software companies have built their businesses. What seemed in 2025 like a distant nightmare scenario has, by 2026, begun to feel almost inevitable: a potential SaaS apocalypse.
This shift is clearly reflected across software stocks, and monday has been among the most affected. Since the beginning of the year, its share price has fallen by 33%, and yesterday’s 21% plunge following the publication of its financial earnings only deepened the slump. Monday, which until a year ago was an investor favorite with a valuation above $10 billion, is currently valued at around $4 billion, well below its 2021 IPO price, after dropping over 45% in 2026. Considering that the company holds $1.5 billion in cash, the market is effectively assigning almost no value to a business expected to generate close to $1.5 billion in revenue.
In recent quarters, monday’s management tended to deflect investor concerns by attributing them to a generally negative sentiment toward software stocks. Yesterday, however, a noticeable change in tone emerged. It was not so much what was said, but how it was said, that created the impression that founders Roy Mann and Eran Zinman, together with CFO Eliran Glazer, are no longer as confident that the company’s future will be rosy.
This subtle shift in tone also affected investors. As the call with analysts progressed, the stock decline deepened even before trading opened in New York. The session began with a drop of “only” 15%, but by the time trading started, the fall had reached 22%. In the first hour alone, trading volume was double that of an average day.
Of course, the issue was not only tone but also the numbers themselves. After already issuing a weak forecast for 2026, both in revenue and profitability, management surprised analysts on the call by announcing that it was withdrawing its 2027 forecast. That forecast, provided just six months ago at an investor day, projected revenue of $1.8 billion. “We will no longer discuss the goals we set for 2027 due to the nature of market changes and the development of AI. We will reexamine long-term targets when there is more certainty,” Glazer said. Pressed further, he added: “There is a lot of noise in the system and changes in the economy. In addition to AI, we did not see the improvements we expected among small customers, so based on what we know today, monday prefers to freeze the 2027 forecast and focus on performance in 2026.”
In a conversation with Calcalist, Zinman and Mann added: “Market sentiment is so negative that you wouldn’t get credit even for an aggressive forecast. We are confident in our ability to deliver, but we don’t want to be in a situation where we are constantly asked about a forecast.”
The capital market can tolerate a disappointing forecast, but it detests the suspension of guidance, especially when it was issued only months earlier. Monday’s position is understandable: like the entire software sector, it is operating in heavy fog and is dependent on the moves of AI giants such as Anthropic, Google, and OpenAI. Any breakthrough from these companies could further erode the value of traditional software firms.
Addressing the broader turmoil, Mann and Zinman sought to project optimism: “We all agree the future will look different. Software will focus more on doing the work than on managing the work. But there is a large gap between how people imagine this transition and how it will actually happen. Companies like monday have a strong ability to reinvent themselves. The software market will be worth ten times more in the future, and many companies like monday will flourish. Budgets for software in 2026 are already showing a significant jump.”
In the short term, however, monday faces additional headwinds. The strong shekel is eroding profitability, as 55% of its employees are based in Israel and paid in shekels. Falling interest rates are also reducing financial income from the company’s large cash reserves. Moreover, monday has recently become profitable under accounting rules and must now pay full corporate tax. In 2025 it benefited from a $60 million tax credit that boosted its bottom line.
Despite meeting its forecasts for the fourth quarter and for all of 2025, with revenue up 27% to $1.2 billion and operating profit of $175 million, the outlook for 2026 is weak. Growth is expected to slow to 18%, with revenue reaching $1.45 billion. Operating profit will remain similar to 2025, meaning profitability will erode from 14% to around 11%-12%. Cash flow is also projected to decline from $323 million to $275-290 million.
The main drag on 2026 performance is the small-business segment, which monday targeted primarily through performance marketing on Google. That channel was hit by algorithm changes favoring AI-generated search results. Company executives admitted yesterday that the small-business market is not recovering and will remain weak, prompting a stronger focus on large enterprises. Monday has about 250,000 customers; while small-business activity is volatile, retention among large organizations remains above 100%, indicating continued expansion.
“Despite the headlines, our customers are not leaving and are not even discussing it,” Mann concluded. “Right now, there is no connection between market sentiment and Monday’s actual situation.”
