Chit Chat Stocks Podcast Summary

Episode: Should I Buy Monday.com Stock? (Ticker: $MNDY)
Date: December 17, 2025
Host(s): Ryan Henderson & Brett Schaefer

Episode Theme & Purpose

This episode provides a comprehensive breakdown of Monday.com ($MNDY), a fast-growing B2B SaaS company. Ryan presents a data-driven analysis of Monday.com’s business model, financials, management, growth story, and competitive landscape, culminating in his own investment decision on the stock. Brett provides context, asks probing questions, and draws out actionable takeaways for investors considering $MNDY. The discussion maintains a balanced, slightly skeptical tone common to seasoned investors weary of SaaS excesses, while recognizing genuine business strengths.

Key Discussion Points & Insights

1. Initial Impressions & SaaS Skepticism

• Ryan expresses skepticism toward B2B SaaS stocks, noting recent industry struggles, hyper-competition, and profit margins that “constantly feel theoretical.”
• Management teams’ heavy reliance on stock-based compensation (SBC) and “proxy statements that piss me off” are highlighted as ongoing frustrations.
  (01:56–03:13)

“It’s one of those things where I go through the work, I think, wow, this is a great business. And then I read the proxy statement and I somehow feel angry at management.”
— Ryan Henderson (02:07)

2. Monday.com’s Growth Story and Business Model

• Despite headwinds, Monday.com stands out for its rapid scaling since 2019:
  • Customers: 90K (2019) → 250K+ (2024)
  • Enterprise customers ($50K+): 73 (2019) → 4,000+ (2024)
  • Revenue: $78M (2019) → $1.2–$1.3B (2024)
  • Cash: $176M → $1.7B
  • Employees: <500 → ~3,000
• 112% net revenue retention rate, signaling strong expansion within existing customers.
• Emphasis on high-growth software playbook: High fixed costs, low marginal costs, customer “lock-in,” reinvesting for future scale.
  (03:37–06:38)

“The organization…has the ability, emphasis on ability here, because they’re not actually doing it, they have the ability to earn way, way, way more profits than they did in 2019.”
— Ryan Henderson (04:48)

3. Financial Snapshot: Margins, Revenue, Profits

• Current (LTM) revenue: $1.1B, with just $5M in GAAP operating income ([06:38]).
• Gross margins near 89%; heavily R&D- and sales-driven expense structure (R&D 25%, S&M 52% of revenue).
• SBC is ~14% of revenue—“Absurd.”
• Free cash flow positive, but heavily padded by SBC; $1.7B cash pile, buybacks newly authorized.
  (30:30–34:17)

“They spend, get ready for this, 14% of their revenue in stock-based compensation. That is really high.”
— Ryan Henderson (34:12)

4. History & Origin Story

• Monday.com spun out of Wix.com—originally an internal task management tool built in-house.
• Founders: Roy Mann and Eran Zinman (both still Co-CEOs), both technical backgrounds.
• WIX received equity for the spin-out; initial product named “Da Pulse,” changed to Monday.com in 2017 due to widespread ridicule (“people thought it was a rapper”).
• IPO’d in 2021 at $7.6B valuation, raising $547M. Historically free cash flow positive thanks to heavy SBC.
  (07:37–14:48, 13:33 quote)

“They decided to change the name to Monday.com in 2017. People were making fun of the name constantly...there was quite a lot of confusion around what the platform actually did and apparently people thought it was a rapper online.”
— Ryan Henderson (13:36)

5. Product Overview & Evolution

• Core: Low-code, highly intuitive task management for teams—“building blocks, drag and drop type of task management…very visual, very intuitive.”
• Rapid viral adoption within orgs due to ease of use; product spreads from small teams to wider usage.
• 90% of revenue is still core work management; verticalized expansions include:
  • Monday CRM (launched 2020, $100M+ ARR, 61% growth—competes with Salesforce for SMBs)
  • Monday Dev (2022, slow growth, $15M ARR—Jira dominates enterprise dev)
  • Monday Service (2025, $7M ARR, fastest launch in company history)
• Cross-sell ambition is “doubtful,” especially with entrenched enterprise competition (e.g. Salesforce, Atlassian’s Jira/Trello); more possible for SMBs than for large orgs.
  (15:56–23:06, 19:10 quote)

“They just built a better mousetrap…a better, cleaner, more intuitive task management software.”
— Ryan Henderson (19:10)

6. Competitive Landscape & Moat (or Lack Thereof)

• Fiercely competitive: Atlassian (Jira, Trello), Asana, ClickUp, Smartsheet, Notion, Airtable, HubSpot, etc.
• Monday’s edge: user-friendliness, rapid viral adoption, generous resources/cash relative to most rivals.
• No insurmountable moat, but high switching costs for enterprise clients: major data migration and retraining barriers. “Gotta get the customers, that’s the hard part. Once you have ‘em, they’ll stay.”
  (26:04–29:55, 28:14 quote)

“It is a crowded space but they have, it was the same case 10 years ago... They’ve still been able to carve out their own customer base and market share.”
— Ryan Henderson (28:14)

7. Stickiness & Retention

• Enterprise cohort ($50K+/yr): 117% net revenue retention; spending rises 17% YoY.
• Churn is higher among smaller clients, but enterprise is “incredibly sticky.”
• Significant labor/cost to switch systems (“prohibitively high switching costs”), especially at scale.
  (36:39–41:37, 38:48 quote)

“It’s sticky at the enterprise level if multiple departments use this. I would be—I imagine churn is extremely low.”
— Ryan Henderson (38:48)

8. Addressing the AI Threat

• Market fear: Could AI let anyone easily build Monday.com competitors?
• Ryan’s hands-on test with Gemini illustrates how non-trivial this is; high friction persists even for technical users (“I have no clue what to do with that answer”).
• Enterprise requirements—SOC 2 compliance, integrations, constant iteration—form real barriers, plus most large orgs want to focus dev resources on core products, not rebuild task management tools.
  (43:25–49:36, 45:52 quote)

“I honestly think this narrative that someone can just spin up a Monday.com competitor...is one of the dumbest things I’ve ever heard if you’ve ever worked in software.”
— Ryan Henderson (45:52)

9. Management & Compensation

• Founders still at the helm; Roy Mann (9.8% stake, founder’s shares with effective veto power), Eran Zinman (3.6%).
• Management praised for product/build skills, but heavy SBC and lack of detailed proxy performance metrics are concerns.
• Executives “apply pressure” when stock languishes—potential risk of founder fatigue or role-shifting if value doesn’t accrue to shareholders.
  (49:38–56:21, 52:35 quote)

“...if you apply enough pressure [to founders], changes can be made is kind of what I’ve witnessed—especially if like everyone at the organization is pissed off about the stock…So far this hasn’t been a huge deal, but just know Roy Mann has a lot of power here.”
— Ryan Henderson (52:35)

10. Valuation and Investment Decision

• Current market cap: $8.2B, net cash ~$1.3B, EV ~$6.8B.
• Trailing EV/FCF: ~19x (“but FCF is kind of a BS metric for them right now because they’ve got all that SBC”).
• Management targeting 20–25% long-term non-GAAP operating margins; Ryan models revenue doubling by 2030 and FCF margin ~33% (SBC moderating to 7–10%).
• Watchpoints: SBC discipline, buybacks, cross-sell success, retention.
• Investment Decision: Starter position. Attractive fundamentals and sticky customer base, but management’s SBC approach and general SaaS sector risks warrant caution.
  (56:02–64:51, 62:45 quote)

“I think I’m going to take a starter position. It is not crazy cheap here…The things I’m watching are stock based comp, management commentary about it, and basically what’s adoption look like across the other products. I want high net revenue retention rate, low SBC as a percentage of revenue…”
— Ryan Henderson (62:45)

Notable Quotes & Memorable Moments

• On SaaS fatigue:

  “I'm starting to get worried that I'm wasting my time…you go through the work, you think, wow, this is a great business. And then I read the proxy statement and I somehow feel angry at management.”
  — Ryan Henderson (01:56)

• On Monday.com’s true strength:

  “It's not novel…they just built a better mousetrap. They built better, cleaner, more intuitive task management software.”
  — Ryan Henderson (19:10)

• On competitive advantage:

  “It’s a crowded space but it was the same case 10 years ago... They've still been able to carve out their own customer base.”
  — Ryan Henderson (28:14)

• On switching costs:

  “Transitioning data out of Monday.com…requires high budget consulting teams...rebuilding all of the processes…org wide rebuilding distraction…training an entire employee base on a new alternative product. It’s sticky…”
  — Ryan Henderson (38:27)

• On the AI “threat”:

  “I honestly think this narrative that someone can just spin up a Monday.com competitor and by someone I mean someone more credible than me...is one of the dumbest things I’ve ever heard if you’ve ever worked in software.”
  — Ryan Henderson (45:52)

• On management & future leadership:

  “We’re about to find out what kind of leaders they actually are. Because…the stock is down 64%…shareholders are calling to get rid of them when times are bad…Either you move to a more technical role or you evolve as a CEO.”
  — Ryan Henderson (52:16, 54:13)

• On investment action:

  “I think I’m going to take a starter position. It is not crazy cheap here…If they keep generating more than a 110% dollar based net revenue retention rate…it's hard for me to imagine the business not doing well…”
  — Ryan Henderson (62:45)

Timestamps for Major Sections

• [01:56] SaaS fatigue and industry context
• [03:37] Monday.com’s 5-year growth metrics
• [07:37] Company’s origin as a Wix.com spinoff
• [15:56] Product demo and vertical expansion efforts
• [26:04] Competitive landscape and switching costs
• [30:30] Financial breakdown and margins
• [36:39] Stickiness & enterprise retention
• [43:25] The AI “threat” tested
• [49:38] Management structure, incentives, and founder’s shares
• [56:02] Valuation and future scenarios
• [62:45] Investment decision: starter position

Conclusion

This episode delivers a thorough, honest stock pitch for $MNDY, grounded in both optimism about the company’s durable growth and caution about elevated SBC and fiercely competitive market dynamics. While Monday.com ticks many boxes for a high-quality, sticky SaaS platform, Ryan’s lingering skepticism around dilution and management’s capital allocation keeps his decision to a “starter” at today’s prices. Listeners received actionable metrics to monitor and a clear-eyed explanation of both risk and reward.