Monday.com's Guidance Miss Sparks Legal Probe, Amplifying Enterprise Pivot Risks

What happened

Monday.com disclosed FY26 revenue guidance of $1.452B to $1.462B on February 9, 2026, representing 18-19% growth that missed Wall Street consensus and its prior trajectory. This prompted a securities law investigation by Levi & Korsinsky LLP for potential disclosure violations, adding legal overhang to an already pressured narrative. The DeepValue report contextualizes this guidance as part of a strategic pivot towards enterprise customers and multiproduct adoption, driven by structural challenges in self-serve acquisition. Market sentiment has hardened around monday.com as a poster child for AI disruption fears, with repeated guidance shortfalls eroding management credibility. Consequently, the investment thesis now hinges more critically on enterprise execution metrics, but under heightened legal and market scrutiny.

Implication

The lawsuit introduces potential financial penalties and reputational damage that could further depress shareholder value and delay any positive re-rating. It reinforces negative market narratives, making it harder for operational improvements to translate into stock gains without clear legal resolution. Investors must prioritize tracking enterprise customer adds, NDR stability, and RPO conversion in the next 2-3 quarters to validate the upmarket offset thesis. Additionally, updates on AI monetization and performance marketing ROI will be essential to assess long-term viability beyond the legal noise. Given these compounded risks, position sizing should remain conservative, with exit triggers tied to enterprise metric deteriorations or escalating legal issues.

Thesis delta

The legal investigation amplifies the guidance credibility issue and adds a new layer of legal risk, but does not fundamentally shift the core thesis dependent on enterprise execution. Investors should now factor in potential legal overhangs and prolonged market skepticism, while maintaining focus on the falsifiability of upmarket growth and backlog conversion as outlined in the DeepValue report.