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On Monday, DA Davidson reaffirmed their positive stance on MongoDB (NASDAQ:MDB) shares, maintaining a Buy rating and a price target of $275.00. The firm’s analyst highlighted the recent decline in MongoDB’s share value, which has fallen 38% from last month’s highs and 47% from peak values in December. According to InvestingPro data, the stock is currently trading below its Fair Value, with 13 analysts recently revising their earnings estimates upward. The company maintains a strong financial position, holding more cash than debt on its balance sheet. This drop has been attributed to a delay in the anticipated benefits from GenAI and a subdued fiscal year 2026 (FY26) outlook, largely due to an expected $50 million impact from reduced multi-year term license revenue for the current year.
MongoDB’s current valuation stands at approximately 5 times enterprise value to FY27 (calendar year 2026) revenue, compared to its SaaS peers experiencing 10-20% growth at roughly 6.9 times EV/CY26 revenue, and those with 20-30% growth at around 9 times EV/CY26 revenue. With a market capitalization of $14.9 billion and revenue growth of 19.2% in the last twelve months, MongoDB demonstrates solid fundamentals. InvestingPro subscribers can access over 12 additional key insights about MongoDB’s financial health and growth prospects. DA Davidson strongly believes in the potential for MongoDB’s Atlas (NYSE:ATCO) growth to accelerate from 24% year-over-year in the fourth quarter of fiscal year 2025 to approximately 27-28% in the first quarter of FY26. This projection is more optimistic than the company’s guidance, which suggested a 24-25% year-over-year increase.
The analyst anticipates that the removal of the unused commitment revenue headwind, which was believed to have hindered Atlas growth by about 4-5 percentage points in the fourth quarter of FY25, will no longer be a factor starting in the first quarter. With stable consumption growth expected in FY26 and a higher contribution from new workloads acquired in the past year, DA Davidson sees the potential for mid-20s or higher Atlas growth in FY26, surpassing the mid-point guidance of approximately 21% year-over-year growth.
The firm posits that these likely outcomes, which could lead to consistent top and bottom-line outperformance, will result in a significant re-rating of MongoDB shares as the year unfolds. With analysts predicting profitability this year and a robust gross profit margin of 73.3%, the company’s outlook appears promising. For detailed analysis and comprehensive insights, investors can access MongoDB’s full Pro Research Report, available exclusively on InvestingPro, along with reports for 1,400+ other top US stocks.
In other recent news, MongoDB’s earnings report revealed a solid quarter, with revenue exceeding expectations by $27.8 million, marking a 20% increase from the previous year. However, the company’s guidance for fiscal year 2026 showed revenue and operating margin projections below consensus, influenced by decreased multiyear deal activity. Despite this, MongoDB’s Atlas platform demonstrated resilience with a 24% revenue increase in the fourth quarter. Analysts have responded with mixed adjustments to their price targets: RBC Capital reduced its target from $400 to $320, while maintaining an Outperform rating, and Guggenheim lowered its target from $325 to $300, keeping a Buy rating.
Citi analysts retained their Buy rating with a $430 target, citing stable fundamentals and growth potential in large-scale migration and new workload acquisition. William Blair reaffirmed its Outperform rating, highlighting MongoDB’s ability to secure new business and improve operating margins. Cantor Fitzgerald adjusted its price target to $332 from $344, maintaining an Overweight rating and expressing optimism about the Atlas platform’s performance.
These developments underscore a cautious yet optimistic outlook from analysts, with MongoDB’s growth trajectory and operational efficiency remaining focal points for investors. The recent acquisition of Voyage AI is viewed as a potential catalyst for MongoDB’s growth, particularly with the expected mainstream adoption of Generation AI technology. As MongoDB navigates these challenges, its stock continues to be closely monitored by the investment community.
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