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On Thursday, Mizuho (NYSE:MFG) Securities adjusted its outlook on MongoDB shares (NASDAQ:MDB), reducing the price target to $250 from the previous $320 while retaining a Neutral rating on the stock. The decision followed MongoDB’s release of their fourth fiscal quarter results, which showed revenues of $548 million, marking a 20% year-over-year increase. This figure surpassed the consensus estimate of $519 million, which had anticipated a 13% year-over-year growth. The stronger performance was attributed to a stabilization in consumption revenue and a 24% year-over-year growth in Atlas (NYSE:ATCO), MongoDB’s database as a service offering, although this represented a slight slowdown from the 26% growth seen in the third fiscal quarter. With a market capitalization of nearly $20 billion and an overall "FAIR" financial health rating according to InvestingPro, MongoDB maintains strong liquidity with a current ratio of 5.2.
Despite the positive results, MongoDB’s revenue guidance for fiscal year 2026 was less encouraging, projecting a 12.6% year-over-year growth, which fell short of the consensus expectations of 18%. The company cited a $50 million headwind from non-Atlas multi-year renewals as a contributing factor to the conservative guidance. This forecast is notably below the expectations held by the buy-side, which had anticipated stronger growth. InvestingPro data shows MongoDB’s impressive five-year revenue CAGR of 45%, though current trading metrics suggest the stock is trading at a premium valuation multiple. For deeper insights into MongoDB’s valuation and growth metrics, including 8 key ProTips, subscribers can access the comprehensive Pro Research Report.
MongoDB’s management has signaled a continued investment in research and development (R&D) and sales efforts. The company is shifting its focus towards enterprise customers and reducing its emphasis on the mid-market segment. The strategy is part of a longer-term vision, which includes harnessing artificial intelligence opportunities. However, Mizuho does not anticipate immediate benefits from this strategic direction to reflect in the near-term performance of the company.
In light of these developments, Mizuho has revised its estimates downward, setting the new price target at $250. This target is based on a next twelve months (NTM) enterprise value to revenue multiple of 8x. The firm reiterated its Neutral rating, suggesting that the current valuation does not present a compelling case for an upgrade in the rating at this time.
In other recent news, MongoDB’s fiscal fourth-quarter earnings were stronger than expected, with a non-GAAP EPS of $1.28, surpassing the consensus estimate of $0.66. The company reported revenue of $548.4 million, exceeding the anticipated $519.6 million, reflecting a 20% year-over-year increase. However, MongoDB’s guidance for fiscal year 2026 was lower than market expectations, with projected revenues between $2.240 billion and $2.280 billion, compared to the consensus of $2.325 billion. This conservative outlook has prompted several firms to adjust their price targets. Needham cut its price target from $415 to $270, while Truist reduced theirs from $400 to $300, both maintaining a Buy rating. Stifel also decreased its target from $425 to $340, and DA Davidson lowered theirs from $360 to $275, both retaining a Buy rating. Citizens JMP adjusted their target to $345 from $380, keeping a Market Outperform rating. Analysts noted that while Atlas, a key revenue driver, showed stable growth, the company’s overall guidance reflects challenges in sustaining high growth rates seen in the past.
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