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MongoDB Shares Down 38% Year to Date: Should Investors Buy the Dip?
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MongoDB (MDB - Free Report) shares have declined 38.1% year to date, underperforming the broader Zacks Computer and Technology sector’s appreciation of 22.5%.
Over the same time frame, shares of Samsara, Fortinet and Cognyte Software have returned 37%, 31.5% and 0.6%, respectively. The industry appreciated 21.3% YTD.
The underperformance of MDB shares can be attributed to challenging macroeconomic conditions, a slowdown in spending in the software sector and intense competition in the database market.
MDB shares are trading at a premium as suggested by a Value Score of F.
For the fiscal year 2025, MongoDB expects revenues to be in the range of $1.92 billion to $1.93 billion.
The Zacks Consensus Estimate for revenues is pegged at $1.92 billion, indicating year-over-year growth of 14.28%.
MDB expects non-GAAP earnings to be in the range of $2.33 per share to $2.47 per share and non-GAAP income from operations to be in the range of $187 million to $195 million.
The consensus mark for fiscal 2025 earnings is pegged at $2.41 per share, up 6.6% in the past 30 days. However, the figure indicates a 27.63% year-over-year decline.
AI Integration to Boost MDB’s Prospect
MongoDB is focusing on investing in AI infrastructure to aid long-term opportunity and greenfield AI applications due to the low cost of building AI-integrated applications and enabling modernization in legacy estates.
In the first half of 2024, MDB invested $2.9 billion in research and development, marking an increase of 21% year over year.
Scalable architecture will be able to reduce latency in processing real-time data in AI-driven workloads.
MongoDB AI Application Program enables companies to use an end-to-end AI technology stack, unified support system and professional services by integrating AWS, Google Cloud, Azure, Accenture and other GenAI providers.
MDB’s document model is designed to handle data sets, including source data, metadata, vector data and generated data, along with real-time operational data, which require backend structures. It aims to leverage AI to process complex data structures faster and efficiently.
MongoDB is integrated with app development frameworks and AI platforms. This will enable developers to integrate it into existing infrastructure based on personalized requirements.
MongoDB’s Expanding Clientele Improves Prospects
MDB recently announced a partnership with BUSINESSNEXT to strengthen autonomous operations in the insurance and banking industry by deploying GenAI and predictive AI.
MDB expects to aid banks and financial institutions with technologically updated systems to enhance operations and customer service by leveraging BUSINESSNEXT’s real-time AI-driven solutions comprising of banking, CRM, lending platforms, digital interaction and chatbots.
The partnership focuses on personalizing customer interactions, optimizing lending procedures and enabling data-driven decision-making by modernizing initiatives and using AI to differentiate its products from other competitors like Samsara, Fortinet and Cognyte Software.
MongoDB also partnered with Microsoft to enable users to use MongoDB Atlas and Microsoft services simultaneously.
Should Investors Buy the Dip With MDB Stock?
MongoDB’s strong financial performance, expanding clientele and increasing AI integration bodes well for investors.
Image: Bigstock
MongoDB Shares Down 38% Year to Date: Should Investors Buy the Dip?
MongoDB (MDB - Free Report) shares have declined 38.1% year to date, underperforming the broader Zacks Computer and Technology sector’s appreciation of 22.5%.
MDB shares have also lagged the Zacks Internet Software industry and its peers like Samsara (IOT - Free Report) , Fortinet (FTNT - Free Report) and Cognyte Software (CGNT - Free Report) .
Over the same time frame, shares of Samsara, Fortinet and Cognyte Software have returned 37%, 31.5% and 0.6%, respectively. The industry appreciated 21.3% YTD.
The underperformance of MDB shares can be attributed to challenging macroeconomic conditions, a slowdown in spending in the software sector and intense competition in the database market.
MDB shares are trading at a premium as suggested by a Value Score of F.
MongoDB, Inc. Price and Consensus
MongoDB, Inc. price-consensus-chart | MongoDB, Inc. Quote
MDB’s Near-Term Prospect Bright
For the fiscal year 2025, MongoDB expects revenues to be in the range of $1.92 billion to $1.93 billion.
The Zacks Consensus Estimate for revenues is pegged at $1.92 billion, indicating year-over-year growth of 14.28%.
MDB expects non-GAAP earnings to be in the range of $2.33 per share to $2.47 per share and non-GAAP income from operations to be in the range of $187 million to $195 million.
The consensus mark for fiscal 2025 earnings is pegged at $2.41 per share, up 6.6% in the past 30 days. However, the figure indicates a 27.63% year-over-year decline.
AI Integration to Boost MDB’s Prospect
MongoDB is focusing on investing in AI infrastructure to aid long-term opportunity and greenfield AI applications due to the low cost of building AI-integrated applications and enabling modernization in legacy estates.
In the first half of 2024, MDB invested $2.9 billion in research and development, marking an increase of 21% year over year.
Scalable architecture will be able to reduce latency in processing real-time data in AI-driven workloads.
MongoDB AI Application Program enables companies to use an end-to-end AI technology stack, unified support system and professional services by integrating AWS, Google Cloud, Azure, Accenture and other GenAI providers.
MDB’s document model is designed to handle data sets, including source data, metadata, vector data and generated data, along with real-time operational data, which require backend structures. It aims to leverage AI to process complex data structures faster and efficiently.
MongoDB is integrated with app development frameworks and AI platforms. This will enable developers to integrate it into existing infrastructure based on personalized requirements.
MongoDB’s Expanding Clientele Improves Prospects
MDB recently announced a partnership with BUSINESSNEXT to strengthen autonomous operations in the insurance and banking industry by deploying GenAI and predictive AI.
MDB expects to aid banks and financial institutions with technologically updated systems to enhance operations and customer service by leveraging BUSINESSNEXT’s real-time AI-driven solutions comprising of banking, CRM, lending platforms, digital interaction and chatbots.
The partnership focuses on personalizing customer interactions, optimizing lending procedures and enabling data-driven decision-making by modernizing initiatives and using AI to differentiate its products from other competitors like Samsara, Fortinet and Cognyte Software.
MongoDB also partnered with Microsoft to enable users to use MongoDB Atlas and Microsoft services simultaneously.
Should Investors Buy the Dip With MDB Stock?
MongoDB’s strong financial performance, expanding clientele and increasing AI integration bodes well for investors.
MDB currently has a Zacks Rank #2 (Buy), which implies that it is a good time for investors to accumulate the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.