Goldman Sachs cuts MongoDB stock target to $335, maintains buy

On Thursday, Goldman Sachs analyst Kash Rangan revised the price target for MongoDB stock (NASDAQ:MDB) to $335 from the previous $390 while reaffirming a Buy rating on the shares. According to InvestingPro data, analyst targets for MongoDB range from $180 to $520, with the stock currently trading at $264.13. The company maintains a "FAIR" overall financial health score of 2.1 out of 5. The adjustment follows MongoDB’s fourth-quarter financial results, which showcased robust performance, particularly from its Atlas (NYSE:ATCO) revenue segment, exceeding expectations by 4%. Despite this, the stock experienced a 16% drop in after-hours trading as investors reacted to a reduction in the company’s revenue growth forecast for fiscal year 2026. The company has demonstrated strong historical growth, with a 5-year revenue CAGR of 45% and current revenue growth of 20.79% in the last twelve months.

MongoDB reported an outperformance in operating margin (OpM) and free cash flow (FCF) was 36% below the consensus. The company has reduced its FY26 revenue growth expectations by approximately 500 basis points, now guiding for a 12.6% increase compared to the Street’s anticipation of 17.5%. InvestingPro analysis reveals 8 additional key insights about MongoDB’s financial position, including its strong balance sheet with more cash than debt and healthy liquidity ratios. This was partially due to a high single-digit percentage decline in non-Atlas revenue, although Atlas consumption trends remained stable.

The initial operating margin guidance indicated a contraction of 500 basis points, which Rangan attributed to conservative estimates based on lower visibility of usage. However, the analyst believes that the steady Atlas consumption trends at the close of the fourth quarter suggest a more robust demand than what is reflected in the company’s guidance. Management’s projections imply an Atlas growth of around 23% for FY26, which is lower than the nearly 29% exit rate, excluding unused commitments.

Rangan posited that if Atlas were to grow at 27% and non-Atlas revenue were to decrease by only 3%, as opposed to the guided 8-9% drop, subscription revenue growth could stabilize at approximately 19%, which would significantly outperform the initial guidance by over 600 basis points. This scenario does not take into account the potential for Atlas growth acceleration in an improving macroeconomic environment. For a comprehensive analysis of MongoDB’s growth potential and valuation, investors can access the detailed Pro Research Report available on InvestingPro, which provides in-depth insights into the company’s financial health and growth prospects.

In other recent news, MongoDB reported strong financial results for Q4 FY2025, exceeding analyst expectations with an earnings per share (EPS) of $1.28, compared to the forecasted $0.66. Revenue also surpassed estimates, reaching $548.4 million against a forecast of $520.54 million. Despite these robust figures, MongoDB’s stock experienced a decline of 16.05% in aftermarket trading. The company completed the acquisition of Voyage AI for $220 million, enhancing its capabilities in AI applications. MongoDB remains debt-free after redeeming its 2026 convertible notes. Analyst firms have not reported any upgrades or downgrades for MongoDB recently. The company’s Atlas platform continues to drive growth, with revenue increasing by 24% year-over-year and accounting for 71% of total revenue. MongoDB projects FY2026 revenue between $2.240 billion and $2.280 billion, anticipating stable growth in Atlas consumption.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.