MongoDB Earnings: Overall Growth Is Slowing, but Atlas’ Growth Still Solid

Key Morningstar Metrics for MongoDB

• Fair Value Estimate: $370.00
• Morningstar Rating: 3 stars
• Morningstar Economic Moat Rating: None
• Morningstar Uncertainty Rating: High

What We Thought of MongoDB’s Earnings

MongoDB MDB reported decent fiscal fourth-quarter earnings, but its fiscal 2025 outlook was disappointing. The company is still set to expand, but not as fast as expected. Factoring in this slower growth, we have lowered our fair value estimate of MongoDB’s stock to $370 per share from $403. Based on the drop in share price of approximately 10% in after-hours trading, we believe the stock remains fairly valued.

The firm had a slight beat on revenue, 5% higher than FactSet consensus. Adjusted earnings per share came in at nearly double FactSet consensus expectations. However, MongoDB guided for fiscal 2025 growth of only 14%, while consensus was looking for growth of closer to 22%, and our expectations were even higher at 26%. This is quite a deceleration from the previous year’s growth rate of 31%.

To explain the deceleration, management pointed to a pull forward of revenue related to unused commitments, combined with unusually strong license revenue that will not repeat next year. These factors will lead to an $80 million headwind in fiscal 2025, roughly 500 basis points of growth. If we factor this in and assume non-Atlas revenue is down $40 million in fiscal 2025, it implies close to a 30% growth rate for Atlas-related revenue for next year. This is important because the fundamental weaknesses we saw at Snowflake SNOW—a combination of worsening consumption patterns, pricing concessions, and workloads moving off the platform—are not happening to the same degree at MongoDB. With that in mind, our updated fair value estimate depends on MongoDB’s ability to reaccelerate growth in the future.