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The market opportunity for Mongodb Inc (NASDAQ:MDB), a software developer behind the open source database MongoDB, is not compelling — at least in the near term, according to Nomura Instinet.
The Analyst
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Analyst Christopher Eberle downgraded Mongodb from Neutral to Reduce and increased the price target from $43 to $63.
The Thesis
The market opportunity for Mongodb is a multiyear — if not multidecade — one, given the intense competition and "deep-pocketed incumbency," Eberle said in a Tuesday note. (See his track record here.)
MongoDB has competition from Microsoft Corporation (NASDAQ:MSFT)'s Cosmos DB, which has grown from zero to $100 million-plus revenue, the analyst said.
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Nomura expects Mongodb's total revenue growth to accelerate from an estimated 50 percent in 2019 to 60-percent-plus in 2020, with the sell-side firm estimating subscription revenue at $371 million, or about 30 percent above consensus.
The new price target for the shares implies 10 times the estimated subscription revenue for 2020, Eberle said.
" ... With intense competition from hundreds of smaller players as well as deep-pocketed incumbents like MSFT, Amazon.com, Inc. (NASDAQ:AMZN) and IBM (NYSE:IBM), we believe the battle will be long and hard-fought, and it's difficult to predict who will come out on top."
The Price Action
Mongodb shares were down more than 4 percent at $75.69 at the time of publication Tuesday.
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Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.