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For second-quarter fiscal 2025, MongoDB expects revenues between $460 million and $464 million. The Zacks Consensus Estimate for revenues is currently pegged at $462.92 million, indicating growth of 9.2% year over year.
Non-GAAP income from operations is anticipated in the range of $35-$38 million. Non-GAAP net income is estimated in the band of 46-49 cents per share. For the fiscal second quarter, the consensus mark for income per share has remained steady at 48 cents in the past 30 days, indicating a decline of 48.4% year over year.
Image Source: Zacks Investment Research
In the last reported quarter, MongoDB delivered an earnings surprise of 34.21%. Markedly, the company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 80.94%.
Our proven model does not conclusively predict an earnings beat for MongoDB this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
MongoDB has been emerging as a developer-favorite for its flexible, scalable and easy-to-use data platform, which has been driving its impressive growth. In the previous quarter, the company's Atlas cloud database service revenues climbed 32% year over year, contributing 70% to total revenues. This impressive growth highlights the increasing shift toward cloud-based database solutions and Atlas's dominance in MongoDB's portfolio.
MongoDB's customer expansion strategy is paying off, with over 49,200 clients as of Apr 30, 2024. The company's success in acquiring and retaining customers, particularly large enterprises, is evident in its high net revenue retention rates. This trend indicates that customers not only stick with MongoDB but also increase their usage over time, providing a stable foundation for growth.
Product innovation has been a key focus, with new features like MongoDB Atlas Vector Search simplifying the integration of generative AI and semantic search capabilities into real-time applications. This innovation is likely to have resonated with customers, driving satisfaction, engagement and potentially higher retention rates.
MongoDB's global reach has been expanding, with the availability of Atlas in 117 cloud regions across Alphabet (GOOGL - Free Report) -owned Google Cloud, Amazon’s (AMZN - Free Report) cloud division, Amazon Web Services and Microsoft (MSFT - Free Report) Azure, catering to customers' data residency, availability and latency requirements.
Strategic partnerships with hyperscale cloud providers are a significant growth driver for MongoDB. The company has deepened collaborations with Google Cloud, optimizing Atlas Vector Search with Vertex AI for generative AI applications and exploring industry solutions for retail and manufacturing.
With AMZN, MDB has been integrating Atlas Vector Search with Amazon Bedrock and optimizing Amazon CodeWhisperer for application development on its platform.
MDB's expanded partnership with MSFT facilitates cloud adoption journeys, with improved accessibility to MongoDB Atlas through the Microsoft commercial marketplace. The partnership is expected to have enabled millions of Azure developers to discover and utilize the service.
By offering its database service across all major cloud platforms and enabling seamless migration between them, MongoDB is positioning itself as the go-to developer data platform, capitalizing on the growing demand for cloud-based, flexible and AI-enabled data solutions. This is expected to have helped the company reach a new customer base in the to-be-reported quarter.
Price Performance & Valuation
MongoDB has seen its stock price plummet 39.4% year to date, underperforming the Zacks Computer and Technology sector’s rise of 22.4%, leaving investors to consider whether to hold onto their shares or cut their losses. The significant downturn has sparked debates among market analysts and shareholders alike as they attempt to decipher the underlying causes and potential future trajectory of the company's stock ahead of the fiscal second quarter earnings.
The sharp decline in MongoDB's stock price can be attributed to a combination of factors, including broader market volatility and concerns about the company's growth prospects in an increasingly competitive landscape.
MongoDB, with its premium valuation, has not been immune to this trend. MongoDB is trading at a premium with a 5-year forward 12-month P/S of 8.77X compared with the Zacks Internet - Software industry’s 2.59X, reflecting a stretched valuation.
MDB’s P/S F12M Ratio Depicts Stretched Valuation
Image Source: Zacks Investment Research
We believe that increasing competition in the database market from both established players and startups raises questions about MongoDB's premium valuation amid potential margin pressure.
Investment Considerations: Balancing Risk and Reward
MongoDB presents an attractive investment option in the database management systems market. As a leading NoSQL platform, it meets the growing demand for flexible, scalable solutions handling diverse data types. Its cloud-based Atlas service drives strong revenue growth and customer adoption. MongoDB's developer-friendly tools and continuous innovation enhance its competitive edge, while its expanding enterprise customer base and increasing average revenue per customer demonstrate market penetration. However, intense competition from SQL and NoSQL providers, potential scalability challenges for certain use cases and a high valuation pose risks. Despite these concerns, MongoDB's specialized approach to modern data challenges and robust ecosystem position it well for sustained growth in the data-driven business landscape.
Conclusion
While MongoDB shows promise in a growing market, investors should weigh its growth potential against competitive pressure and valuation concerns. The company's innovative technology and strong market position suggest that it may be premature to abandon the ship entirely. New investors should wait for a better entry point for MongoDB, which currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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MongoDB (MDB) Stock Before Q2 Earnings: To Buy or Not to Buy?
MongoDB (MDB - Free Report) is scheduled to report second-quarter fiscal 2025 results on Aug 29.
For second-quarter fiscal 2025, MongoDB expects revenues between $460 million and $464 million. The Zacks Consensus Estimate for revenues is currently pegged at $462.92 million, indicating growth of 9.2% year over year.
Non-GAAP income from operations is anticipated in the range of $35-$38 million. Non-GAAP net income is estimated in the band of 46-49 cents per share. For the fiscal second quarter, the consensus mark for income per share has remained steady at 48 cents in the past 30 days, indicating a decline of 48.4% year over year.
Image Source: Zacks Investment Research
In the last reported quarter, MongoDB delivered an earnings surprise of 34.21%. Markedly, the company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 80.94%.
MongoDB, Inc. Price and EPS Surprise
MongoDB, Inc. price-eps-surprise | MongoDB, Inc. Quote
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for MongoDB this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
MongoDB has an Earnings ESP of 0.00% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors to Note
MongoDB has been emerging as a developer-favorite for its flexible, scalable and easy-to-use data platform, which has been driving its impressive growth. In the previous quarter, the company's Atlas cloud database service revenues climbed 32% year over year, contributing 70% to total revenues. This impressive growth highlights the increasing shift toward cloud-based database solutions and Atlas's dominance in MongoDB's portfolio.
MongoDB's customer expansion strategy is paying off, with over 49,200 clients as of Apr 30, 2024. The company's success in acquiring and retaining customers, particularly large enterprises, is evident in its high net revenue retention rates. This trend indicates that customers not only stick with MongoDB but also increase their usage over time, providing a stable foundation for growth.
Product innovation has been a key focus, with new features like MongoDB Atlas Vector Search simplifying the integration of generative AI and semantic search capabilities into real-time applications. This innovation is likely to have resonated with customers, driving satisfaction, engagement and potentially higher retention rates.
MongoDB's global reach has been expanding, with the availability of Atlas in 117 cloud regions across Alphabet (GOOGL - Free Report) -owned Google Cloud, Amazon’s (AMZN - Free Report) cloud division, Amazon Web Services and Microsoft (MSFT - Free Report) Azure, catering to customers' data residency, availability and latency requirements.
Strategic partnerships with hyperscale cloud providers are a significant growth driver for MongoDB. The company has deepened collaborations with Google Cloud, optimizing Atlas Vector Search with Vertex AI for generative AI applications and exploring industry solutions for retail and manufacturing.
With AMZN, MDB has been integrating Atlas Vector Search with Amazon Bedrock and optimizing Amazon CodeWhisperer for application development on its platform.
MDB's expanded partnership with MSFT facilitates cloud adoption journeys, with improved accessibility to MongoDB Atlas through the Microsoft commercial marketplace. The partnership is expected to have enabled millions of Azure developers to discover and utilize the service.
By offering its database service across all major cloud platforms and enabling seamless migration between them, MongoDB is positioning itself as the go-to developer data platform, capitalizing on the growing demand for cloud-based, flexible and AI-enabled data solutions. This is expected to have helped the company reach a new customer base in the to-be-reported quarter.
Price Performance & Valuation
MongoDB has seen its stock price plummet 39.4% year to date, underperforming the Zacks Computer and Technology sector’s rise of 22.4%, leaving investors to consider whether to hold onto their shares or cut their losses. The significant downturn has sparked debates among market analysts and shareholders alike as they attempt to decipher the underlying causes and potential future trajectory of the company's stock ahead of the fiscal second quarter earnings.
The sharp decline in MongoDB's stock price can be attributed to a combination of factors, including broader market volatility and concerns about the company's growth prospects in an increasingly competitive landscape.
MongoDB, with its premium valuation, has not been immune to this trend. MongoDB is trading at a premium with a 5-year forward 12-month P/S of 8.77X compared with the Zacks Internet - Software industry’s 2.59X, reflecting a stretched valuation.
MDB’s P/S F12M Ratio Depicts Stretched Valuation
Image Source: Zacks Investment Research
We believe that increasing competition in the database market from both established players and startups raises questions about MongoDB's premium valuation amid potential margin pressure.
Investment Considerations: Balancing Risk and Reward
MongoDB presents an attractive investment option in the database management systems market. As a leading NoSQL platform, it meets the growing demand for flexible, scalable solutions handling diverse data types. Its cloud-based Atlas service drives strong revenue growth and customer adoption. MongoDB's developer-friendly tools and continuous innovation enhance its competitive edge, while its expanding enterprise customer base and increasing average revenue per customer demonstrate market penetration. However, intense competition from SQL and NoSQL providers, potential scalability challenges for certain use cases and a high valuation pose risks. Despite these concerns, MongoDB's specialized approach to modern data challenges and robust ecosystem position it well for sustained growth in the data-driven business landscape.
Conclusion
While MongoDB shows promise in a growing market, investors should weigh its growth potential against competitive pressure and valuation concerns. The company's innovative technology and strong market position suggest that it may be premature to abandon the ship entirely. New investors should wait for a better entry point for MongoDB, which currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.