Is monday.com Ltd. overvalued or undervalued?

As of 22 August 2025, the valuation grade for monday.com Ltd. has moved from expensive to very expensive, indicating a significant shift in its perceived market value. The company appears overvalued based on its current financial metrics. Key ratios include a P/E ratio of 294, a Price to Book Value of 14.08, and an EV to Sales ratio of 13.44, all of which suggest that the stock is trading at a premium compared to its earnings and asset values.
In comparison to its peers, monday.com Ltd. has a notably higher P/E ratio than Paylocity Holding Corp., which stands at 40.42, and a much worse EV to EBITDA ratio compared to CCC Intelligent Solutions Holdings, Inc. at 34.67. Additionally, while the stock has outperformed the S&P 500 in the short term with a 7.5% return over the past week and a 15.18% return over the past month, it has significantly underperformed on a year-to-date basis with a -12.43% return compared to the S&P 500's 12.22%. This performance reinforces the notion that the stock may be overvalued in the current market environment.