Monday.com (MNDY) Stock

During a question-and-answer session at the 1997 Worldwide Developer Conference, Steve Jobs, who had returned to Apple (NASDAQ: AAPL) as a consultant, responded to a critic who questioned his vision. Jobs responded that he wanted to serve customers and then build a technological platform around that service, not the other way around.

Essentially, monday.com expands on this concept for the benefit of the emerging generation. A workflow management system, monday.com facilitates custom-made operational roadmap solutions for enterprise-level clients. Here’s how to get involved.

Monday.com Financial History

With the forwarding of multiple technological platforms in database and customer relations management (CRM), no shortage of innovation exists. Therefore, the discussion surrounding monday.com isn’t necessarily about its capacity but rather what the company can do for its clients. From that perspective, MNDY stands out for its incredible utility, particularly for well-known enterprises.

According to its website, monday.com’s clients include blue-chip heavyweights like Adobe (NASDAQ: ADBE), Coca-Cola (NYSE: KO) and NBC — which is under Comcast (NASDAQ: CMCSA) — among several other firms.

This robust client base translates into real growth. For full-year 2020, monday.com generated revenue of $161.1 million, which is up over 106% from 2019’s tally of $78.1 million. During 2020 and for the 1st quarter of 2021, the workflow firm posted most of its sales (52%) from outside the U.S. Though encouraging, you should know that MNDY’s net loss widened to $152.2 million in 2020 from a $91.6 million net loss in 2019.

Finally, monday.com enjoyed much success raising capital through private funding rounds that began in August 2012. In a Series D raise on July 30, 2019, the tech firm raised $150 million from lead investor Sapphire Ventures, a Silicon Valley-based venture capital firm.

Monday.com Potential

All service-related startups claim to offer various operational and managerial efficiencies and solutions. But monday.com is one of the few distinct firms that features a track record of success with global juggernauts. Additionally, that MNDY generates most of its revenues outside the U.S. suggests that its platform cuts across borders.

Further, the workflow management industry should enjoy significant expansion as enterprises throughout the world adapt to a new normal in the labor force. Because connectivity is such a vital component to operational protocol, it’s crucial that individual contributors work seamlessly with each other. Thus, experts believe that the underlying industry for monday.com could generate worldwide revenue of more than $2.4 billion by 2027.

While the bullish narrative for MNDY stock is intriguing, investors should be aware that a core risk factor is competition. Moreover, technology constantly evolves. Further down the line, it’s possible that innovations such as the blockchain could disrupt monday.com. The widening net losses also suggest that the underlying industry is capital intensive, posing share dilution risks.

Still, one wildcard is the COVID-19 pandemic. As you know, the public health crisis forced millions of white-collar employees to work from home. Evidence suggests that most want to maintain their remote-work lifestyle. If companies relent, a mass-scale remote worker base would play perfectly into monday.com’s hands.

How to Buy Monday.com (MNDY) Stock

How you participate in an IPO really comes down to your pocketbook and connections. If you have a sizable account and know some folks, you may receive a tap on the shoulder from IPO underwriters, giving you the chance to buy pre-IPO shares or equity units at their initial offering price.

On the other hand, if you’re a regular retail buyer, you’re often left with little choice but to buy IPO stocks at the open. The primary disadvantage is the IPO pop. A much-anticipated debut usually ends up trading for a price substantially higher than the initial offering.

Nevertheless, buying on opening day has its advantages too. For one thing, you enjoy the freedom of only participating in IPOs that you want to without outside pressure. Second, the process is easy. If you know how to buy stocks, it’s second nature. If you don’t, follow the steps below.

Step 1: Pick a brokerage.

When online brokerages first made their debut, they offered unprecedented access to individual retail investors. At the same time, some pressure existed to make the right choice. Due to the wide variance in costs, investors had to perform due diligence on both their stocks and brokers.

Nowadays, the process is much easier. Thanks to the advent of mobile trading apps, brokerages began competing fiercely for clients. The result is that financial incentives, such as commission-free trading, are standard fare.

Thus, you should pick a brokerage that suits your lifestyle and ambitions. If you prefer convenience over function, you’ll find that investment apps are more than adequate. However, if you want to develop your trading acumen, you should opt for a comprehensive platform.

Below is a list of best brokers to consider.

Step 2: Decide how many shares you want.

Though it might seem a mundane exercise, you should give serious thought on how many shares you want to purchase. Your selection determines your risk-reward profile. The more shares you own, the greater your profitability if the target stock swings higher. Conversely, if the stock drops, more exposure means more pain.

Whatever you decide, make sure to come up with a number based on careful reasoning, not during the day of a hectic market session.

Step 3: Choose your order type.

Before placing your trade, make sure to understand the below concepts:

• Bid: The bid is the highest price a buyer will offer. It is always lower than the ask.
• Ask: The ask is the minimum price that a seller will accept. It is always higher than the bid.
• Spread: The difference between the bid and ask price is the spread. It also signifies market liquidity and risk. Narrower spreads suggest higher liquidity levels and lower risk due to buyer availability, while it’s the opposite scenario for wider spreads.
• Limit order: Place a limit order to trade a stock at only a specific price. There is no guarantee the market will fulfill a limit order.
• Market order: To buy shares at the going rate, place a market order, which executes at the next available price. Buy orders will execute on the ask while sell orders execute on the bid.
• Stop-loss order: A stop-loss order automatically exits you out of your position at either a predetermined price or the next available price, whichever comes first. Please note that if a new session gaps down below your predetermined price (gap-down session), a stop-loss fulfills at the current going rate.
• Stop-limit order: A stop-limit order is more transparent, only fulfilling at a predetermined price. But if the stock’s price continues to fall following a gap-down session, you would have been better off placing a stop-loss order.

Step 4: Execute your trade. 

To execute a market order, follow these steps:

1. Select action type (buy or sell).
2. Enter the shares you want to acquire (or sell).
3. Hit the Buy (or Sell) button.

Follow the same steps above with limit orders, with the exception that you must enter your desired price of execution.

Making Sense of Technology

Though the broader workflow management space is replete with technological wizardry, monday.com’s genius is its ability to impart intuitive practicality and efficiency. In other words, it’s a platform built around serving the customer rather than glorifying the innovation. Better yet, several blue-chip firms recognize the incredible value in monday.com, signing up for its services and solutions.

To be sure, competition ranks as one of the challenges to MNDY stock. Nevertheless, the COVID-19 crisis might make the underlying industry much bigger than anticipated as the labor force becomes widely distributed. This trend aligns with monday.com’s core business, adding an intriguing touch to the MNDY IPO.