Latest news with #JoshBaer
Economic Times
6 days ago
- Business
- Economic Times
Stock plunge at Monday.com sends shockwaves - here's the troubling reason you need to know
Revenue Guidance Falls Short of Expectations AI Fears Trigger Major Selloff in Shares Live Events Is Artificial Intelligence Disrupting the Software Business Model? FAQs (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel took a sharp tumble recently, sending ripples across the software industry and raising fresh concerns about how artificial intelligence (AI) is reshaping the sector's future, as per a report. The project management software company's stock dropped 26.5% after reporting second-quarter results that beat expectations, but then issuing a cautious revenue forecast that left investors uneasy, according to Stock key worry is that guidance for the third quarter fell short of Wall Street's anticipation, signaling a possible slowdown in growth, as per the report. The company projected revenue between $311 million and $313 million, just below analysts' estimates. On top of that, profitability showed signs of strain, with the GAAP operating margin slipping to -3.9% from a positive 0.8% a year earlier, according to Stock Story. Free cash flow margin also declined 20.1% compared to last year, as per the READ: VA hospitals in crisis! Audit exposes every center faces severe staffing shortages - are veterans at risk? This combination of weaker future outlook and shrinking margins spooked investors, despite solid recent performance, as per the Stock Story report. The steep selloff in its shares reflects broader fears across the software industry about the disruptive power of AI, which many worry could upend traditional business models by enabling faster, cheaper software development, according to has dropped 21.5% since the beginning of the year, and at $181.31 per share on Monday, it is trading 44.7% below its 52-week high of $327.92 from February 2025, as reported by Stock Story. While Morgan Stanley analyst Josh Baer raised his rating on to overweight on Tuesday, highlighting that the stock's pullback 'more than incorporates' risks of AI disrupting search advertising and performance marketing, as reported by READ: Kevin O'Leary says legendary investor Charlie Munger nailed everything, except this one investing move The stock market reaction wasn't limited to alone, even European software giants, including SAP, biggest company by market value, saw its shares fall sharply, as per the Bloomberg report. SAP dropped more than 7% in Frankfurt, wiping out nearly €22 billion ($26 billion) in market value in a single session, according to Bloomberg. Other industry players like Sage Group and Dassault Systemes also slid amid mounting concerns that AI could spell tough competition ahead, as per the Capital Markets analysts led by Matthew Hedberg, said that, 'Software valuations remain under pressure from the 'death of software due to AI' narrative, which likely drives continued volatility in the short term,' as quoted in the Bloomberg analyst Brent Thill pointed out that, 'Investors are fearing that AI is going to eat software and multiples are going to fall apart,' adding, 'I think the fear is overblown, but nevertheless we are living through a period right now where investors just really don't care about the group,' as quoted in the READ: Is it AI or Trump's policies? US sees brutal 140% layoff spike in July, worst surge since early COVID chaos Because its Q3 revenue forecast fell short of expectations, despite strong Q2 earnings, as per the Stock Story down 21.5% in 2025 and about 45% off its February high.
CNBC
12-08-2025
- Business
- CNBC
Morgan Stanley says buy the dip on this software stock, calls for 50% surge
Now is the time for investors to buy shares of , according to Morgan Stanley. The firm upgraded the stock to overweight from equal weight but slashed its price target to $260 from $330. However, that updated target still implies 49.3% upside from Monday's close. Shares tumbled nearly 30% during Monday's session after second-quarter results came out. While earnings and revenue beat analyst expectations, mixed third-quarter guidance and lackluster metrics sent the stock plunging. "Skinnier beat against higher expectations and focus on paid search commentary drove shares meaningfully lower, creating the entry point for which we've been waiting," analyst Josh Baer wrote in a Tuesday note. "With shares -30% on Monday 8/11 after results and -40% over the last month, MNDY has meaningfully underperformed peers." MNDY 1M mountain MNDY, 1-month The analyst said that the stock's decline over the last month factors in the risks related to artificial intelligence's impact on search advertising as well as the company's use of performance marketing. To him, those concerns are "overblown." "Moving upmarket, expanding to multi-product and shifting to a sales-led growth motion comes with risk, but also comes from a position of strength and represents a large and compelling opportunity. We think can successfully navigate most of these major changes," Baer continued, adding that this "large opportunity is underpriced." Shares were poised to reverse course from Monday's losses, seeing a more than 1% in the premarket Tuesday. The stock has plunged more than 45% over the last six months, far underperforming the S & P 500's more than 5% gain in the timeframe. Most analysts are bullish on LSEG data shows that 22 of the 24 who cover the stock rate it a buy or strong buy.
Yahoo
14-03-2025
- Business
- Yahoo
DocuSign's AI-Powered Platform Gains Momentum, Analysts See Double-Digit Growth Potential
DocuSign (NASDAQ:DOCU) surged on Friday climbing over 15% in early trading, with analysts seeing a clearer path to double-digit growth in fiscal 2026, despite the company's cautious outlook. Warning! GuruFocus has detected 5 Warning Sign with DOCU. A major driver is Intelligent Agreement Management (IAM), DocuSign's AI-powered platform, which is expanding faster than expected. IAM has cut some customer contracting times by 75% and is now the company's fastest-growing product. In Q4, it accounted for a high single-digit percentage of deal volume and over 20% of direct new customer deals in the small and mid-market segment. Morgan Stanley analysts, led by Josh Baer, noted that improving retention rates and strong IAM billings make double-digit growth increasingly realistic. IAM is projected to grow fivefold to a $320 million annual run rate in fiscal 2026, despite initial traction coming primarily from smaller businesses rather than large enterprises. Citizens maintained its Market Outperform rating and $124 price target, citing DocuSign's dominance in e-signatures, a $50 billion total addressable market, and strong leadership. Meanwhile, Evercore ISI sees a revenue reacceleration by fiscal 2027 as current billings convert into revenue. DocuSign is set to showcase its latest AI advancements at its Momentum25 event on April 16 in New York. Adobe (ADBE), a rival in the e-signature space, edged up 1% in early trading. This article first appeared on GuruFocus. Sign in to access your portfolio
