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On Thursday, Needham maintained a Buy rating on MongoDB shares (NASDAQ: NASDAQ:MDB) but reduced the price target from $415.00 to $270.00. The adjustment follows MongoDB’s forecast for fiscal year 2026, which fell short of market expectations. Currently trading at $264.13 with a market capitalization of $19.7 billion, MongoDB has shown strong revenue growth of 19.2% over the last twelve months. InvestingPro analysis reveals 8 additional key insights about MongoDB’s performance and outlook. The company experienced an unanticipated $50 million revenue outperformance from its Non-Atlas business during FY25, a result unlikely to be repeated. This outperformance has led to a smaller pool of renewals for FY26, which is significant due to the nature of upfront revenue recognition in multi-year deals. According to InvestingPro data, MongoDB maintains strong financial health with a current ratio of 5.2, indicating robust liquidity to meet short-term obligations.
MongoDB’s Atlas (NYSE:ATCO) platform, accounting for 71% of the company’s revenue, is now the focus for future revenue growth. Year-over-year consumption growth for Atlas has stabilized. Additionally, MongoDB is expected to see benefits from a stronger cohort of acquired workloads in FY25 compared to FY24. While currently unprofitable, analysts tracked by InvestingPro expect the company to turn profitable this year, with projected earnings per share of $3.42 for FY2026. For detailed analysis and comprehensive insights, investors can access MongoDB’s Pro Research Report, part of InvestingPro’s coverage of over 1,400 US stocks. Despite this, the company indicated that Atlas Consumption growth is not anticipated to reach the same high levels of revenue outperformance as seen with Non-Atlas revenue.
The company’s recent performance has highlighted the challenges of sustaining high growth rates. MongoDB’s Non-Atlas business contributed significantly to its revenue in the past, but this is not expected to continue as a trend moving forward. The company’s guidance reflects a more conservative outlook, taking into account the smaller renewal pool and the reliance on Atlas to drive future growth.
Investors are now looking towards Atlas to deliver revenue outperformance. MongoDB’s guidance has set expectations on the growth potential of Atlas, noting that while it is positioned to contribute to revenue, it may not provide the same level of exceptional growth seen in the Non-Atlas segment in the past.
The price target reduction reflects the company’s updated guidance and the anticipated changes in revenue composition. MongoDB’s focus on Atlas as a primary revenue driver is clear, and the company’s performance in FY26 will be closely watched to assess the platform’s ability to maintain and increase its contribution to the overall revenue. Based on InvestingPro’s Fair Value analysis, MongoDB appears slightly overvalued at current levels, though the company maintains a Fair overall Financial Health score and holds more cash than debt on its balance sheet.
In other recent news, MongoDB reported fourth-quarter earnings that exceeded expectations, with a non-GAAP EPS of $1.28, surpassing the consensus estimate of $0.66. The company’s revenue for the quarter reached $548.4 million, above the anticipated $519.6 million, marking a year-over-year increase of 20%. Despite these strong results, MongoDB’s guidance for fiscal year 2026 did not meet Wall Street’s expectations, with projected revenues ranging from $2.240 billion to $2.280 billion, falling short of the consensus of $2.325 billion. Analysts have adjusted their price targets in response to the company’s mixed guidance. Truist Securities reduced its target to $300 while maintaining a Buy rating, and Stifel lowered its target to $340, also retaining a Buy rating. DA Davidson set a new target of $275, and Citizens JMP adjusted its target to $345, both maintaining positive ratings on the stock. BofA Securities significantly cut its target to $286, continuing to endorse MongoDB with a Buy rating. Analysts highlighted MongoDB’s Atlas product as a key growth driver, with expectations of continued revenue expansion despite the cautious guidance. These developments are being closely watched by investors as they assess MongoDB’s future performance.
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