Our FVE Went Up Along With Our Confidence in MongoDB as Its Relational Win Opportunity Grows

After MongoDB’s MDB annual investor session, we are increasing our fair value estimate for MongoDB shares to $379 per share from $335 per share out of increased confidence in MongoDB’s ability to convert legacy relational customers to MongoDB’s document-based, nonrelational platform. We previously were more conservative on the opportunity here, as the road to such conversions are extremely complex. However, today MongoDB announced the general availability of their Relational Migrator, which simplifies the process of legacy relational database users moving over to MongoDB’s platform. In addition, we’ve been tracking impressive wins from Oracle—such as China Mobile (announced with the firm’s last earnings results), which moved a subset of workloads to MongoDB that ended up increasing performance to 80%.

While we have increased confidence in MongoDB converting legacy relational customers, the investor session largely highlighted new offerings in the wheelhouse of what we have consistently believed MongoDB does best: streamlining the developer experience in the nonrelational database universe. These newly announced tools include vector search (an integral part of generative AI) and stream processing (the ability to take action onto new data as it is funneling into a database in real time). We continue to believe nonrelational database needs will drive the majority of new growth in the database management software market. However, this does not undermine the massive conversion opportunity in the existing relational database market that we believe now can help further push MongoDB’s market share in the fast-growing data management software market from roughly 2% today to 3% by 2030.