Company Reports

No-moat-rated MongoDB reported decent fiscal fourth-quarter earnings; however, the fiscal 2025 outlook was disappointing. The company is still set to expand, but not as fast as expected. As we factor in slower growth than we were previously expecting, driven by the disappointing outlook, we are lowering our fair value estimate to $370 from $403. We thought shares were fairly valued heading into today’s earnings. Based on the drop in share price of approximately 10% afterhours, our updated fair value estimate implies shares are fairly valued once again.

Since 2007, MongoDB has amassed millions of users of its document-based database, as workload shifts to the cloud has accelerated data collection growth as a whole and thus the need for architectures to store such data (particularly NoSQL variants like document-based databases). MongoDB has remained the most desirable database (both SQL and NoSQL included) for professional developers to learn globally for years, according to Stack Overflow. We think such interest will persist as MongoDB’s more recent cloud database-as-a-service and data lake offerings help ensure MongoDB’s rich features transform to meet new technological needs.

Since 2007, MongoDB has amassed millions of users of its document-based database, as workload shifts to the cloud has accelerated data collection growth as a whole and thus the need for architectures to store such data (particularly NoSQL variants like document-based databases). MongoDB appears to be doing anything but losing steam, as its database technology has remained the most desirable database (both SQL and NoSQL included) for professional developers to learn globally over the last four years, according to Stack Overflow. We think such interest will persist as MongoDB’s more recent cloud database-as-a-service and data lake offerings help ensure MongoDB’s rich features transform to meet new technological needs.

No-moat MongoDB’s third-quarter results were stellar, coming in well above our estimates and FactSet consensus as enterprise revenue exceeded expectations, partially thanks to higher volumes in multiyear deals. In our view, momentum indicates just how strong demand is for MongoDB’s capabilities—from its core document-based database (which we believe excels because it is easy to use), or newer features like artificial intelligence-generated code. Such strength led the firm to raise its outlook for the year. Despite the excellent quarter, the market reacted poorly with shares dropping by about 6%. The mismatch was a result of several words of caution from management, who highlighted near-term headwinds that the firm is facing for long-term rewards. We have a strong conviction that such near-term investments and mix shifts will benefit the firm in the long run, enabling it to reap more value from the seedlings of strong switching costs we see throughout the business. As a result, we are increasing our fair value estimate for MongoDB to $403 per share from $379 per share. Shares traded near $409 per share after-hours and this leaves the stock within 3-star, fairly valued territory.

MongoDB posted a solid quarter, exceeding our expectations all around as consumption of the firm’s cloud platform, Atlas, proved rosier even with it feeling the effects of the weak macroeconomic environment. With retention rates remaining high, we continue to believe MongoDB has all the right seeds of a switching cost moat that will pay off in the long run. We are maintaining our fair value estimate of $379 per share, as we remain confident in MongoDB’s positioning at the right place and the right time amid a mass data boom that will require the technical flexibility and ease of use MongoDB is known for. With afterhours shares trading near $398, up 4%, we view shares as fairly valued.

After MongoDB's annual investor session, we are increasing our fair value estimate to $379 per share from $335 to reflect our increased confidence in the company's ability to convert legacy relational customers to its document-based, nonrelational platform. We previously were more conservative on the opportunity here, as the road to such conversions is extremely complex. However, on June 22, the company announced the general availability of Relational Migrator, which simplifies the process of legacy relational database users moving to MongoDB's platform. In addition, we've been tracking impressive wins from Oracle, such as China Mobile (announced with the last earnings results), which moved a subset of workloads to MongoDB that ended up increasing performance by 80%.

Since 2007, MongoDB has amassed millions of users of its document-based database, as workload shifts to the cloud has accelerated data collection growth as a whole and thus the need for architectures to store such data (particularly NoSQL variants like document-based databases). MongoDB appears to be doing anything but losing steam, as its database technology has remained the most desirable database (both SQL and NoSQL included) for professional developers to learn globally over the last four years, according to Stack Overflow. We think such interest will persist as MongoDB’s more recent cloud database-as-a-service and data lake offerings help ensure MongoDB’s rich features transform to meet new technological needs.

History repeated itself, as no-moat MongoDB started its fiscal 2024 with outstanding results—similar to last year's start. Year-over-year revenue growth was a whopping 8 points above our initial projections as consumption in MongoDB's cloud platform, Atlas, far surpassed our and management's expectations in the quarter. We believe this quarter's results were solid evidence of MongoDB's increasing grab of the database management software market, which we believe MongoDB will be able to continue, all while further expanding operating margins (reaching GAAP profitability by fiscal 2027, in our view). Because of the stellar quarter, outlook was upped. However, management is modeling a sharp sequential deceleration after the second quarter, which has us taking pause of adjusting our fair value estimate. Nonetheless, we remain very confident in MongoDB's hearty growth trajectory—as we think the company can surpass $8 billion in revenue by fiscal 2033. As a result, we are maintaining our fair value estimate of $335 per share. With the stock popping by 23% upon results, MongoDB shares have now crossed into 3-star territory from once undervalued territory. For investors still looking for attractive entry points into the database management software market and the players that we believe will thrive from the exponentially growing datasphere, or data in total existence, we recommend Snowflake shares.

No-moat MongoDB’s fourth quarter was impressive amid ongoing macroeconomic headwinds, with revenue and non-GAAP earnings per share both above our expectations. However, guidance for the first quarter and full year was significantly below our previous forecasts as a result of its cloud platform, Atlas, being materially affected by a difficult macroeconomic environment. Given the disappointing top-line outlook, we have tempered our growth expectations for MongoDB and are lowering our fair value estimate to $335 per share from $360, even with rolling our model forward. With after-hours shares trading at $206, down around 10%, we view shares as undervalued. Despite our lowered growth expectations, we still maintain our long-term thesis that MongoDB is partially insulated from macroeconomic uncertainty due to its mission-critical product resulting in very little churn. Additionally, we view the market as undervaluing the size of the database management market and believe MongoDB still has a significant growth runway.

Since 2007, MongoDB has amassed millions of users of its document-based database, as workload shifts to the cloud has accelerated data collection growth as a whole and thus the need for architectures to store such data (particularly NoSQL variants like document-based databases). MongoDB appears to be doing anything but losing steam, as its database technology has remained the most desirable database (both SQL and NoSQL included) for professional developers to learn globally over the last four years, according to Stack Overflow. We think such interest will persist as MongoDB’s more recent cloud database-as-a-service and data lake offerings help ensure MongoDB’s rich features transform to meet new technological needs.

No-moat MongoDB’s third quarter was an exceptional one, posting revenue and non-GAAP earnings per share far surpassing our forecasts and FactSet Consensus. MongoDB saw abundant improvement in the quarter compared with the second quarter as usage on their platform bounced back broadly, including in vulnerable Europe and the midmarket. Management expects this to be the result of an emerging seasonal effect, and thus had not initially baked this in. New seasonality trends aside, MongoDB’s seemingly unstoppable growth, even amid a tough backdrop, became clear with the level of expanding partnerships in the quarter, in both co-selling with major hyperscalers and independent software vendors. We think that major hyperscalers more prominently selling MongoDB is telling, as the three major cloud vendors have competing offerings. These developments only increase our confidence that MongoDB stands to be a large gainer in database management software market share to come based on exceptional technical abilities.

No-moat MongoDB’s second quarter was a strong one—posting revenue well above our expectations and non-GAAP earnings per share higher than our forecasts. Guidance was more of a mixed story—as revenue expectations were boosted substantially, with the range of non-GAAP losses per share worsening. However, we think the less rosy EPS forecast is not concerning. We admire management’s ability to invest heavily now—given its current momentum—at the expense of poor public perception in the short term. By doing so, we think MongoDB will reap robust returns on invested capital with help from what we see as seeds of switching costs today. Marrying insights from this quarter and updates at MongoDB World in June, we are raising our fair value estimate to $360 per share from $344 per share. With after-hours shares trading near $278, down 14%, we view shares as attractive for investors wanting exposure to the mission-critical database management space via one of its long-term winners.

Since 2007, MongoDB has amassed millions of users of its document-based database, as workload shifts to the cloud has accelerated data collection growth as a whole and thus the need for architectures to store such data (particularly NoSQL variants like document-based databases). MongoDB appears to be doing anything but losing steam, as its database technology has remained the most desirable database (both SQL and NoSQL included) for professional developers to learn globally over the last four years, according to Stack Overflow. We think such interest will persist as MongoDB’s more recent cloud database-as-a-service and data lake offerings help ensure MongoDB’s rich features transform to meet new technological needs.

On June 7, MongoDB kicked off its MongoDB World conference, boasting the latest of its database platform's capabilities. The day's agenda has left us even more confident in our $344 fair value estimate for this no-moat name that helps simplify enterprises' database needs through easy-to-use and broad-based database capabilities. We believe the market is undervaluing the impressive software company in two ways—first, by undervaluing the size of its overall database management market, and second, by applying an undue discount for macroeconomic uncertainty, which we believe will have relatively little effect on the mission-critical data use cases to which MongoDB's document database pertains.

No-moat MongoDB started its fiscal 2023 with few query worries. Year-over-year revenue growth topped our estimate by a whopping 10-plus percentage points, leading to positive non-GAAP earnings per share despite our negative expectations. Behind the beat was MongoDB's Enterprise Advanced offering surprising management by growing sequentially, instead of declining, as customers migrate to MongoDB's Atlas cloud database. Nonetheless, we are not alarmed by the outperformance of MongoDB's legacy product, as Atlas growth remained robust. Additionally, we believe there will be virtually zero churn when Enterprise Advanced customers eventually migrate to Atlas. With earnings, management stressed that macroeconomic risk is mainly limited to lower-end self-service and midmarket customers growing revenue per account at a slower pace. We agree with this statement, as we believe that data management software is extremely sticky—especially for large enterprises—and even for smaller businesses, risk typically does not lie in existing workloads going away unless a company goes out of business. As a result, we maintain our $344 per share fair value estimate. With after-hours shares trading near $256, up 6%, we view shares as attractive for long-term investors.

Since 2007, MongoDB has amassed millions of users of its document-based database, as workload shifts to the cloud has accelerated data collection growth as a whole and thus the need for architectures to store such data (particularly NoSQL variants like document-based databases). MongoDB appears to be doing anything but losing steam, as its database technology has remained the most desirable database (both SQL and NoSQL included) for professional developers to learn globally over the last four years, according to Stack Overflow. We think such interest will persist as MongoDB’s more recent cloud database-as-a-service and data lake offerings help ensure MongoDB’s rich features transform to meet new technological needs.

No-moat MongoDB closed fiscal 2022 with strong fourth-quarter results nicely above our expectations, while also providing rosier guidance for the year ahead than we were baking in. Revenue outperformance was led by strength in Atlas, MongoDB’s database as a service offering. MongoDB has a long runway for growth within the database market, providing high-quality software to clients that increase efficiency and expand use-case capability. Most significantly, the firm has grown its presence as a mission-critical service as more clients migrate workloads to the cloud.

Since 2007, MongoDB has amassed millions of users of its document-based database, as workload shifts to the cloud has accelerated data collection growth as a whole and thus the need for architectures to store such data (particularly NoSQL variants like document-based databases). MongoDB appears to be doing anything but losing steam, as its database technology has remained the most desirable database (both SQL and NoSQL included) for professional developers to learn globally over the last four years, according to Stack Overflow. We think such interest will persist as MongoDB’s more recent cloud database-as-a-service and data lake offerings help ensure MongoDB’s rich features transform to meet new technological needs.

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.

MongoDB reported strong second-quarter results that well exceeded management’s and our prior expectations, while also raising fiscal 2022 guidance. Revenue outperformance was driven by success in Atlas, MongoDB’s database as a service offering. On the back of a booming database market, MongoDB’s product superiority is increasingly demonstrated in the efficiency its platform affords developers, expanding use-case applicability, and the evolving mission-criticality of the applications moving to Atlas. Updating for the notable raise in 2022 guidance and what we foresee as an even more dramatic rise in the size of the global datasphere in the outer years of our explicit forecast, we are increasing our fair value estimate for the no-moat name to $288 per share from $226. With shares trading near $451, up 12% in the aftermarket, we view MongoDB as considerably overvalued--even as we bake in a stellar next 10 years as the rise in the size of the global datasphere directly creates an opportunity for MongoDB to store this incremental new data.