MongoDB shares tumble despite strong earnings on 'disappointing' news for investors

By Nora Redmond

Shares in MongoDB fell in premarket trading.

Shares of MongoDB tumbled on Wednesday after the document-database company reported that its Atlas service saw the same rate of growth for the fifth straight quarter.

The New York-headquartered company said its Atlas multi-cloud database grew 29%, beating guidance of 26% but, as Morgan Stanley analysts wrote, "disappointing investors looking for 30%."

MongoDB's stock (MDB) slumped 13% in premarket trading, to $376.04. It closed Tuesday down 4%, shortly before it posted its second-quarter results.

The company, which was founded in 2007 and originally named 10gen, announced a year-over-year revenue increase of 30% - $771.8 million - beating analysts' forecasts of $735 million, according to FactSet.

MongoDB also lifted its revenue guidance to a range of between $2.99 billion and $3.03 billion, up from $2.92 billion to $2.96 billion for the fiscal year. For earnings per share, it raised its outlook to between $6.39 and $6.58, from a range of $5.95 to $6.14.

"We delivered strong second quarter results, highlighted by 30% year-over-year revenue growth - the highest level of growth in several years - and continued strong profitability," CEO CJ Desai said in a statement.

Analysts at Morgan Stanley, led by Sanjit Singh, wrote in a note Wednesday that "the catch" in MongoDB's earnings was Atlas' sustained growth for the fifth reporting season when the market had hoped for a marginal acceleration of 1% to 30%. They noted that this led to a selloff following a significant rally in the past month, which saw the stock climb 29%.

However, the analysts said that the company's business "remains very solid," lifting their price target for its stock from $380 to $430.

Cantor also raised its price target, upgrading their forecast from $434.21 to $540.

"We continue to view MongoDB as a beneficiary of secular app modernization trends and dynamic AI growth trends," Cantor analysts headed by Thomas Blakey said in a Tuesday note.

-Nora Redmond

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09-02-26 0658ET