Wall Street Debates MongoDB's Q4 Report

Mongodb Inc MDB, the first database company to file for an initial public offering in more than two decades, reported better-than-expected fourth quarter-results Tuesday. The company said it lost 40 cents per share in Q4 on revenue of $45 million against expectations of a 43-cent-per-share loss on revenue of $42.16 million.

The Analysts

  • Canaccord Genuity's Richard Davis maintains a Buy rating on MongoDB's stock with a price target lifted from $35 to $45.
  • Morgan Stanley's Sanjit Singh maintains an Equal-weight rating on MongoDB's stock with a price target raised from $32 to $35.
  • Stifel's Brad Reback maintains a Buy rating on MongoDB's stock with a price target lifted from $34 to $43.

Canaccord: 'Very Good' Report

MongoDB's earnings report shows that its aggressive go-to-market strategy continues to drive scale, which in turn fuels more growth and "exponential separation" from its competition, Davis said in a research report. The company does operate in a business where there is no "winner take all," as the market itself is growing at more than 40 percent, the analyst said. Instead, the market is one where a "winner takes most business" — and MongoDB will scale to become a substantial business, he said. 

Buying MongoDB's stock at current levels is a "very wise" investment decision, even though it appears to already be "highly valued in an expensive sector," Davis said. 

Related Link: The Dropbox IPO: Everything You Need To Know

Morgan Stanley: Conservative Guidance

MongoDB's "solid" earnings report is highlighted by another quarter of more than 50-percent year-over-year subscription revenue growth, Singh said in a research report. Looking forward, the company's MongoDB 4.0 could prove to "become one of the most consequential releases" in its history, the analyst said. 

MongoDB's product line is likely to be compelling enough to help the company beat its fiscal 2019 revenue guidance, which implies a "material deceleration" to 37-to-39-percent growth.

Despite expectations for outperformance ahead, the stock's valuation needs to be considered in an investment decision, Singh said. Shares are trading at approximately 7x calendar 2019 revenue, which already prices upside performance, so investors may want to wait for a better entry point, he said. 

Stifel: Momentum Remains In Place

MongoDB's second earnings report as a public company was much like its first, as all key financial metrics came in ahead of expectations, Reback said in a research report. Most notably, MongoDB Atlas grew over 500 percent from a year ago and now accounts for 11 percent of total revenue. Atlas was also included in multiple six-figure contract wins, which highlights the solid demand from both new and existing users, Reback said. 

The ongoing momentum in Atlas also signals the company's future growth potential, as this offering should enable MongoDB to "more effectively monetize the low-end of the database market while also helping existing users scale up their usage of its database platform over time," the analyst said. 

Price Action

Shares of Mongodb were trading higher by nearly 5 percent midday Wednesday. 

Related Link:

Earnings Scheduled For March 14, 2018

Posted In: Brad RebackCanaccord GenuityDatabaseIPOMongoDB AtlasMorgan StanleyRichard DavisSanjit SinghStifelAnalyst ColorEarningsNewsPrice TargetReiterationTop StoriesAnalyst Ratings