Gold prices hold losses as US-EU trade deal eases safe‑haven demand
On Wednesday, Goldman Sachs analyst Kash Rangan adjusted the price target for Couchbase Inc (NASDAQ:BASE) stock, lowering it to $16.00 from the previous $18.00, while maintaining a Sell rating. According to InvestingPro data, analyst targets for the stock currently range from $18 to $26, with the stock trading near $16.25. Rangan’s commentary followed the release of Couchbase’s fiscal fourth quarter results, which demonstrated a total revenue exceeding consensus estimates by 3%, and annual recurring revenue (ARR) that was 1% higher in constant currency (CC). Despite these positive results, including a 26% growth in net new ARR (NNARR) in constant currency, the analyst has chosen to retain a bearish outlook on the stock.
The company achieved a second consecutive quarter of free cash flow (FCF) breakeven and reported its first quarter of operating income breakeven. Couchbase’s stock showed a 4% increase after-hours as investors seemed to respond favorably to the fiscal fourth quarter performance, which surpassed a high seasonal hurdle rate, and to the solid bottom-line outperformance in operating margin and FCF margin. The ARR guidance, which was only slightly below consensus expectations at 16% compared to the consensus of 17%, also contributed to the positive investor sentiment.
Rangan acknowledged the strong execution in the fourth quarter, noting improvements in strategic account expansions, increased Capella consumption and migrations, and displacement wins. However, the analyst expressed continued concerns over Couchbase’s growth rate, which is below 20% for ARR despite being smaller in scale compared to its database counterparts with comparable growth rates. This concern is reflected in the company’s current financial health score, which InvestingPro rates as Weak, with particularly low scores in profitability and price momentum. Get access to 8 more exclusive ProTips and comprehensive analysis in the Pro Research Report. The analyst also pointed to the competitive landscape, which has been intensifying with recent acquisitions in the industry, such as IBM (NYSE:IBM)’s acquisition of Datastax on February 25 and MongoDB (NASDAQ:MDB)’s acquisition of Voyage AI on February 24.
The path to breakeven operating income and free cash flow for Couchbase is projected to be extended, with a target set around fiscal year 2027. While management has adopted a conservative stance for fiscal year 2026 guidance, Rangan suggests that a sustained inflection in new business trends that supports a return to over 20% ARR growth and a quicker path to FCF breakeven could lead to a reevaluation of the current cautious stance. The stock has experienced significant volatility, with a -41.99% return over the past year, though InvestingPro’s Fair Value analysis suggests the stock is currently fairly valued.
In other recent news, Couchbase reported impressive financial results, capturing the attention of investors. The company posted fourth-quarter revenue of $54.9 million, marking a 10% year-over-year increase and surpassing analyst estimates of $53.25 million. Despite this revenue growth, Couchbase reported a wider-than-expected adjusted loss per share of -$0.30, missing the consensus forecast of -$0.08. For the full fiscal year 2025, Couchbase’s revenue grew by 16% to $209.5 million, with annual recurring revenue reaching $237.9 million, a 17% increase from the previous year. The company also achieved a record in free cash flow, generating $4 million in Q4 compared to a negative cash flow of $7.7 million in the same quarter last year. Looking forward, Couchbase provided revenue guidance for fiscal 2026 of $228-232 million, which is below the analyst consensus of $236.7 million. Additionally, the company has launched new products, including Capella AI Services and integrations with NVIDIA (NASDAQ:NVDA) AI, to meet the rising demand for AI-powered database applications.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.