MongoDB's Concerns About Outlook Despite Strong Q4 Results: Analysts Revise Forecasts

Zinger Key Points
  • MongoDB’s FY25 guidance shows 13%-15% growth and around 10% in operating margins, both short of expectations, one analyst says.
  • Management’s increased confidence stems from “a stable macro and more predictable consumption patterns,” another analyst notes.

MongoDB Inc MDB shares were down on Friday after the company reported its fourth-quarter results and issued weak guidance.

The results came amid an exciting earnings season. Here are some key analyst takeaways from the release.

DA Davidson On MongoDB

Analyst Rudy Kessinger upgraded the rating from Neutral to Buy, while raising the price target from $405 to $430.

Although MongoDB reported strong fourth-quarter results, its shares slid on disappointing fiscal 2025 guidance, which projected growth of 13%-15% and operating margins of around 10%, missing the consensus estimate of 22% and 14%, respectively, Kessinger said in the upgrade note.

“Rev will face a $80M headwind in FY25 from multi-year term licenses ($40M) & unused Atlas commitments ($40M) that will not repeat,” the analyst stated. “This is very high GM Rev that is not repeating, and when combined with accelerated hiring, OMs will take a step back from 16% in FY24,” he added.

Truist Securities On MongoDB

Analyst Miller Jump maintained a Buy rating while reducing the price target from $500 to $475.

MongoDB reported its fourth-quarter results ahead of expectations, “driven by broad strength in their DBaaS and self-managed businesses,” Jump said. He added, however, that the company’s guidance for the year ahead “implies a significant deceleration at the topline and retrenchment of their margin gains.”

“Commentary from management revealed multiple puts and takes in the calculation, and we believe that their outlook may ultimately prove conservative,” the analyst further wrote.

KeyBanc Capital Markets On MongoDB

Analyst Eric Heath reiterated an Overweight rating while trimming the price target from $543 to $490.

MongoDB reported “solid” fiscal fourth-quarter revenues at $24 million, representing 6% growth, with a beat across Atlas and EA, Heath said in a note.

Management noted increased confidence versus last year, the analyst stated. “We believe the increased confidence comes from a stable macro and more predictable consumption patterns,” he added.

Check out other analyst stock ratings.

Goldman Sachs On MongoDB

Analyst Kash Rangan reiterated a Buy rating while reducing the price target from $485 to $440.

MongoDB’s subscription revenue, operating margin, and free cash flows outperformed Street expectations, Rangan said. Rangan added, however, that the stock declined on the “significant expectation reset for top and bottom-line.”

“We believe FY guidance of +14% revenue growth screens conservative given consumption trends remained solid exiting F4Q (NRR >120%) and management’s guide factors for stable (not improving) app usage activity in FY25, which leaves room for outperformance against Atlas’ implied net new revenue -4% in FY25 vs. -7% in FY24 if the operating environment inflects positively,” the analyst wrote.

Mizuho Securities On MongoDB

Analyst Siti Panigrahi maintained a Neutral rating while slashing the price target from $420 to $380.

“MDB reported a strong quarter, delivering revenue and operating margins ahead of consensus expectations driven by solid Atlas growth (+34% Y/Y) and continued outperformance in EA,” Panigrahi wrote in a note.

Management’s fiscal 2025 guidance of 13%-15% growth came in below consensus expectations as the company “faces tough comps” due to not recognizing “revenue from unused Atlas commitments in FY25 compared to $40M recognized in FY24” and an additional $40 million in non-Atlas revenue being recognized in fiscal 2024, Panigrahi added.

Needham On MongoDB

Analyst Mike Cikos reaffirmed a Buy rating while reducing the price target from $495 to $465.

MongoDB's shares came under pressure on disappointing revenue growth guidance and “we are buyers on weakness,” Cikos said. “MongoDB has traditionally provided conservative initial full-year guidance, and we believe its FY25 outlook is consistent with this philosophy,” he added.

“The surprise revelation from the earnings call was that MongoDB recognized $80 Million-plus in FY24 Revenue, evenly split between unused Atlas commitments and multi-year licensing deals for EA, which are not expected to recur in FY25,” the analyst wrote.

JMP Securities On MongoDB

Analyst Patrick Walravens reiterated a Market Outperform rating and a price target of $440.

MongoDB delivered better-than-expected quarterly results, with non-GAAP earnings of 86 cents per share on revenues of $458 million, meaningfully higher than the consensus estimates of 46 cents per share and $433 million, respectively, Walravens said.

Guidance came in “significantly below expectations,” he added. “While we note the potential for a significant upside case if MongoDB executes well across FY25, for now we are lowering our estimates consistent with the company’s guidance,” the analyst stated.

MDB Price Action: Shares of MongoDB had declined by 6.31% to $386 at the time of publication on Friday.

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Posted In: Analyst ColorEarningsNewsUpgradesPrice TargetReiterationAnalyst RatingsMoversTrading IdeasDA DavidsonEric HeathExpert IdeasGoldman SachsJMP SecuritiesKash RanganKeyBanc Capital MarketsMike CikosMiller JumpMizuho SecuritiesNeedhamPatrick WalravensRudy KessingerSiti PanigrahisoftwareStories That MatterTruist Securities
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