MNDY Plunges 29% on Earnings: Can This AI-Driven Work Platform Rebound?

Summary
• Monday.com (MNDY) slumps 28.98% intraday to $176.15, its lowest since May 2024
• Q2 revenue hits $299M (+27% YoY), but Q3 guidance falls short of $313M midpoint
• AI product launches and 117% NDR for large customers contrast with margin compression
• RSI at 25.89 (oversold), Bollinger Bands near lower bound, and 200-day MA at $274.15
Monday.com’s stock has imploded on mixed earnings, with a 29% intraday drop despite record customer growth and AI innovation. The disconnect between fundamentals and price action raises urgent questions about valuation sustainability and market sentiment shifts.

Bearish Guidance Overshadows Strong Fundamentals
Monday.com’s 29% intraday collapse stems from a critical misalignment between Q2 performance and Q3 expectations. While revenue grew 27% to $299M and net dollar retention for >$100K ARR customers hit 117%, the company guided Q3 revenue to $311-313M—$10M below the $312M consensus. GAAP operating margin deteriorated to -3.9% from +0.8% YoY, and free cash flow margin fell to 20.1% from 38.8% in Q1. These forward-looking metrics triggered a liquidity cascade as investors recalibrated growth assumptions.

Software Sector Mixed as Microsoft Holds Steady
The iShares Expanded Tech-Software Sector ETF (IGV) gained 0.9% despite MNDY’s collapse, with Microsoft (MSFT) down 0.14%. While Monday.com’s AI-driven work platform competes with Asana and Smartsheet, the broader sector remains resilient. Microsoft’s Azure AI growth and Adobe’s Firefly integration highlight divergent AI monetization strategies, but Monday.com’s margin compression signals sector-wide valuation pressures.

Options Playbook: Capitalizing on Volatility and Technical Breakdowns
• 200-day MA: $274.15 (below current price)
• RSI: 25.89 (oversold)
• MACD: -12.1 (bearish), Signal: -8.73
• Bollinger Bands: $239.62–$310.07 (current price near lower bound)
• 52W range: $174.28–$342.64 (intraday low at $174.28)
Monday.com’s technicals suggest a potential rebound from oversold levels, but structural risks persist. The 200-day MA at $274.15 and 52W low at $174.28 form a critical support cluster. A break below $175 would validate a bearish trend, while a close above $200 could trigger short-term bounces.
Top Options Plays:
1. MNDY20250815P165 (Put, $165 strike, Aug 15 expiry)
- IV: 64.77% (elevated)
- Delta: -0.201 (moderate bearish exposure)
- Theta: -0.0589 (slow time decay)
- Gamma: 0.0212 (moderate sensitivity)
- Turnover: $208,980 (liquid)
- Price change: +550% (volatility spike)
- Payoff at 5% downside ($167.34): $12.34/share
- This put offers asymmetric upside if the stock gaps below $175, leveraging high IV and liquidity.
2. MNDY20250815C185 (Call, $185 strike, Aug 15 expiry)
- IV: 68.30% (elevated)
- Delta: 0.263 (moderate bullish exposure)
- Theta: -0.8329 (aggressive time decay)
- Gamma: 0.0233 (moderate sensitivity)
- Turnover: $770,210 (liquid)
- Price change: -97.28% (oversold)
- Payoff at 5% downside ($167.34): $0 (out-of-money)
- This call is a high-risk/high-reward play for a short-term rebound above $200, but theta decay accelerates as expiry nears.
Action: Aggressive bears should prioritize MNDY20250815P165 for a 5% downside scenario. Bulls should wait for a close above $200 before initiating longs.

Backtest monday.com Stock Performance
The -29% intraday plunge of MNDY on August 11, 2025, presents a notable event for backtesting the stock's performance. Here's a look at how MNDY performed in the immediate aftermath of this event:1. Short-Term Performance: - The intraday low of MNDY on August 11, 2025, was a significant event, representing a 29% decline from the opening price. - The stock's reaction in the immediate post-earnings period is crucial for understanding market sentiment. 2. Support Levels and Rebound Potential: - The intraday range on August 11 spanned $175.05–$189.36, reflecting sharp volatility. - The stock's 15.4% turnover rate and 85.29 P/E ratio indicate lingering fragility. - The RSI’s oversold reading and MACD’s bearish crossover suggest a potential rebound, but such signals should be approached with caution due to the stock’s current fragile state.3. Long-Term Performance: - The -29% drop aligned with broader market concerns and sector pressures, which may have led to a prolonged period of underperformance. - The stock's trajectory in the following days to weeks would be indicative of the market's sentiment and the company's fundamentals.4. Lesson for Future Events: - A similar drop in the future might present a buying opportunity if the underlying fundamentals and market conditions are strong. - Investors should consider the company's long-term growth prospects, its ability to withstand sector volatility, and the market's reaction to any future news or earnings reports.In conclusion, while the -29% intraday plunge of MNDY on August 11, 2025, is a significant event, it is important to consider the broader market context and the company's fundamentals when assessing its performance in the short and long term.

Critical Juncture: Break Below $175 Triggers New Downtrend
Monday.com’s 29% drop reflects a market reassessment of its growth trajectory, with Q3 guidance and margin compression invalidating previous valuation multiples. While the stock trades near 52W lows and oversold RSI levels, structural risks persist until it reclaims $200. Investors should monitor the $175 psychological level—breaking this would confirm a bearish trend. Microsoft’s -0.14% move underscores sector resilience, but Monday.com’s AI monetization challenges remain unproven. Act now: Buy MNDY20250815P165 if $175 breaks, or wait for a $200 retest before considering longs.