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On Thursday, Guggenheim Securities adjusted their price target for MongoDB (NASDAQ:MDB) shares, reducing it from $325.00 to $300.00, while maintaining a Buy rating on the company. Analyst Howard Ma at Guggenheim highlighted the disparity between MongoDB’s business performance and its market valuation, particularly after a sharp after-hours sell-off that saw the company’s shares fall by 16%. Currently trading at $264.13, InvestingPro analysis suggests the stock is fairly valued, with analysts’ targets ranging from $180 to $520. Despite recent volatility, MongoDB has delivered a 13.45% return year-to-date.
Ma pointed out that MongoDB’s conservative guidance, in contrast to its peers’ more aggressive forecasting, might have fueled the sell-off. However, he noted that if the $50 million impact from non-Atlas upfront multi-year license headwinds were considered, the FY26 guidance would imply a growth of 14-16% and a similar increase in operating profit.
MongoDB’s Atlas (NYSE:ATCO) platform, which accounts for 71% of total revenue, grew by 24% in the fourth quarter, outperforming both consensus estimates of 19% and buy-side expectations of 23%. Adjusted for prior-year unused commitments, the growth rate would be 28%. Ma expects Atlas growth to remain stable or improve in FY26 due to various factors, including a higher quality FY25 customer cohort, additional workloads from enterprise agreement customers, and benefits from recent investments in AI. InvestingPro data reveals MongoDB maintains impressive fundamentals with a 73.32% gross profit margin and 19.22% revenue growth. For deeper insights into MongoDB’s financial health and growth prospects, including 8 additional ProTips, explore the comprehensive Pro Research Report available on InvestingPro.
The analyst also mentioned that FY26 is viewed as a transition year by MongoDB’s management. They plan to invest in go-to-market strategies to enhance brand awareness and drive more relational migrations, with Java applications on Oracle (NYSE:ORCL) identified as a particular opportunity. Additionally, R&D efforts will focus on integrating the Voyage AI acquisition to create a comprehensive platform for building Generation AI applications.
Despite the revised price target, Guggenheim’s confidence in MongoDB’s stock remains, with the firm maintaining its Buy rating and adjusting the price target to reflect lowered revenue forecasts.
In other recent news, MongoDB’s fourth-quarter results showed a notable performance, with revenues reaching $548 million, a 20% increase from the previous year, surpassing consensus estimates of $519 million. William Blair reaffirmed its Outperform rating, highlighting MongoDB’s non-GAAP operating margin of 20.5%, which exceeded forecasts by 932 basis points. Despite these positive results, the company’s Net Revenue Retention rate was slightly below the target, at approximately 118%.
Cantor Fitzgerald maintained an Overweight rating but adjusted the price target to $332, citing optimism about the Atlas platform’s performance. Piper Sandler also maintained an Overweight rating but reduced the price target to $280, noting growth concerns and headwinds in the Enterprise Agreement segment. Canaccord Genuity lowered its price target to $320 while maintaining a Buy rating, emphasizing MongoDB’s potential in the AI value chain.
Mizuho (NYSE:MFG) Securities reduced the price target to $250 and maintained a Neutral rating, pointing out MongoDB’s conservative revenue guidance for fiscal year 2026. The company plans to focus on enterprise customers and AI opportunities, although Mizuho does not foresee immediate benefits from this strategy. These developments reflect varying analyst perspectives on MongoDB’s growth prospects and strategic direction.
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