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Investing.com - Piper Sandler raised its price target on MongoDB (NASDAQ:MDB) to $400 from $345 on Thursday, while maintaining an Overweight rating on the database software company. The company, currently valued at $25.4 billion, has seen its stock surge over 67% in the past six months. According to InvestingPro data, 30 analysts have recently revised their earnings estimates upward for the upcoming period.
The investment firm cited MongoDB’s vision to scale to $5 billion in revenue and pursue a path to Rule of 40, a benchmark where a company’s revenue growth rate plus profit margin exceeds 40 percent. The company’s current revenue growth rate stands at 21.9%, with a healthy gross profit margin of 72.3%.
Piper Sandler expressed particular enthusiasm about MongoDB taking a more aggressive stance challenging PostgreSQL as a potential default for artificial intelligence applications, noting that "skeptics were proven wrong" about MongoDB’s ability to compete in the past.
The firm justified its higher valuation target with an increased EV/FCF multiple of 30x, up from 28x previously, based on MongoDB’s favorable three-to-five year outlook that includes annual margin expansion targets of 100-200 basis points.
Piper Sandler also indicated that "further evidence of AI monetization could warrant multiple expansion" for MongoDB shares.
In other recent news, MongoDB has seen several adjustments in its stock price targets from major investment firms. Cantor Fitzgerald raised its price target to $406, citing the company’s strong performance in its Atlas platform and a promising outlook in the AI data stack. BMO Capital increased its target to $365, maintaining an Outperform rating after gaining insights into MongoDB’s growth prospects at an analyst event. UBS set a new target of $330 while retaining a Neutral rating, following MongoDB’s annual customer conference that outlined a 3-5 year growth outlook. Meanwhile, Macquarie adjusted its target to $305, pointing to stable usage trends and a growing Atlas base as positive indicators. RBC Capital maintained its price target at $350 with an Outperform rating, emphasizing MongoDB’s potential in AI workloads and the launch of its new Application Modernization Platform. These developments reflect a general positive sentiment among analysts about MongoDB’s future growth and strategic positioning.
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