After Earnings, Is MongoDB Stock a Buy, a Sell, or Fairly Valued?

MongoDB released its fiscal third-quarter earnings report on Dec. 1. Here’s Morningstar’s take on MongoDB’s earnings and stock.

Key Morningstar Metrics for MongoDB

• Fair Value Estimate: $303.00
• Morningstar Rating: ★★
• Morningstar Economic Moat Rating: None
• Morningstar Uncertainty Rating: Very High

What We Thought of MongoDB’s Fiscal Q3 Earnings

MongoDB reported another breakout quarter, with total revenue up 19% and Atlas revenue expanding 30% year over year. On top of the rolling 12-month customer addition approaching 10,000 for the first time, management shared that major customers are “getting bigger and growing for longer.”

Why it matters: We are amazed by MongoDB’s pace of achieving operating leverage. Despite the growth of the fully managed Atlas service dragging gross margin, the company’s non-GAAP operating margin is on track to improve nearly 300 basis points for fiscal 2026.

• Bottom-up adoption among database engineers provides an effective self-serve marketing motion, freeing MongoDB’s marketing resources for big accounts. We think vector search’s availability in the free community edition should further boost near-term growth potential for customer count.

The bottom line: We’ve raised our fair value estimate for no-moat MongoDB to $303 per share from $244 after integrating higher margin and revenue outlooks. Shares remain overvalued following our fair value adjustment.

• We think the stock’s 22% after-hours jump rightfully reflects investors’ enthusiasm for MongoDB’s near-term outperformance. However, the current stock price is charting a perfect growth path well beyond the 2020s, requiring significant AI workload capture.
• A review of recent DB-Engines ranking trends shows that PostgreSQL’s popularity outweighs MongoDB on both the one-year and three-year marks, which continues to impair our conviction about the sustainability of MongoDB’s growth in the long term.

Coming up: Management provided a sanguine fourth-quarter outlook; raised full-year revenue outlook by over $100 million to $2.437 billion and earnings per share outlook by over $1.00 to $4.78, respectively, at the midpoint.

• While the company did not offer explicit fiscal 2027 guidance, management expressed confidence in continued strategic investment driven by positive revenue growth for the new fiscal year.

Fair Value Estimate for MongoDB

With its 2-star rating, we believe MongoDB’s stock is moderately overvalued compared with our long-term fair value estimate of $303 per share, which implies a fiscal 2026 enterprise value/sales multiple of 10 times. We expect MongoDB to achieve a five-year compound annual growth rate of 18%.

MongoDB has established itself as the mainstream solution for document-oriented databases. We anticipate that MongoDB Atlas should benefit from incremental data workloads from the existing customer base and become the primary growth driver for the company, as more clients move their databases to public clouds.

Between fiscal 2022 and the first half of fiscal 2026, the average annual recurring revenue for major customers who spend over $100,000 a year doubled. Expanding workloads from existing customers is key to supporting MongoDB’s double-digit top-line growth through fiscal 2035. The boom in new AI-powered applications should provide a continued tailwind for MongoDB’s expansion.

Read more about MongoDB’s fair value estimate.

Economic Moat Rating

We assign MongoDB a no-moat rating because we currently see limited adoption of document-oriented databases for mission-critical workloads that embody strong switching costs. MongoDB’s structural design makes it an optimized tool for agile software development; however, too much flexibility can also lead to maintenance headaches in the long run. Therefore, customers tend to stick with relational databases like Oracle to store their most important financial and operational data.

While MongoDB’s annual recurring revenue expansion rate is high at 118%, and it is a widely regarded leader among document-oriented databases, we need more evidence that MongoDB can remain an integral part of the enterprise tech stack in the long term before awarding the company a narrow moat. Also, the ramping trajectory of MongoDB’s new AI functionalities bring an additional layer of uncertainty to the company’s future expansion of return on invested capital.

Read more about MongoDB’s economic moat.

Financial Strength

We think MongoDB is financially stable thanks to its prudent acquisition approach. As of fiscal year-end 2025, MongoDB has over $2.3 billion in cash and equivalents, and its cash and equivalents balance has been growing steadily over the past five years. MongoDB’s $220 million Voyage AI deal is the only major acquisition in the company’s history. We expect the acquisition of Voyage AI to more than triple MongoDB’s goodwill balance of $70 million as of fiscal 2025. That said, goodwill should remain a very small part of MongoDB’s total assets, and we don’t view goodwill impairment as a major concern for MongoDB’s balance sheet.

Read more about MongoDB’s financial strength.

Risk and Uncertainty

We assign MongoDB a Very High Uncertainty Rating because of the intense market competition and the uncertainty around new workloads derived from AI-powered application development.

Read more about MongoDB’s risk and uncertainty.

MDB Bulls Say

• Demand for new applications powered by AI should continue to increase and fuel growth for MongoDB.
• MongoDB Atlas should enjoy an extended growth runway as the cloud migration of OLTP databases is still at an early stage.
• MongoDB’s friendly user experience and free Community Server should continue to increase its penetration among the developer community and incentivize the adoption of commercial offerings.

MDB Bears Say

• The rise of new database technologies can reduce the number of optimized use cases for document-based databases, limiting MongoDB’s long-term growth potential.
• Artificial intelligence can revolutionize the existing application development workflow and undercut MongoDB’s importance.
• Competition could further intensify for MongoDB as hyperscalers and other NoSQL database vendors invest more resources into product development.

This article was compiled by Frank Lee.