MongoDB Posts Stellar Q3 Beat As Atlas Paves the Way; Still, Shares Are Significantly Overvalued

MongoDB reported third-quarter results that were well beyond the company's high end of guidance all around, leading to a partial after-hours rebound from the stock's significant sell-off, as the stock had been down by about 25% over the past month ahead of earnings results. MongoDB’s Atlas offering, which is its database as a service, or DBaaS, continued to fuel exceptional growth, leading to more optimistic guidance given for the remainder of the year. As a result, we're raising our fair value estimate for the no-moat name to $314 per share from $288 per share. However, with shares up about 18% in after hours, trading near $505, we view MongoDB as considerably overvalued. As a reminder, we already bake in substantial revenue growth and margin expansion ahead for the company. Specifically, we think MongoDB will hit $1 billion in revenue by 2023 and shortly thereafter, make it to $6 billion in revenue by 2031. Nonetheless, we think the market's even more optimistic take is a function of not fully realizing the Amazon threat.