RBC maintains MongoDB stock Outperform rating, $400 target

On Wednesday, RBC Capital Markets reiterated their Outperform rating on MongoDB (NASDAQ:MDB) shares, maintaining a price target of $400.00. Currently trading at $293.64, MongoDB commands a market capitalization of $21.8 billion. According to InvestingPro data, analysts maintain a bullish consensus on the stock, with price targets ranging from $180 to $520. The firm addressed concerns about competitive pressures from PostgreSQL, suggesting that these fears are exaggerated and that MongoDB’s stock presents an attractive risk/reward proposition for investors.

According to RBC Capital analysts, despite the debate over whether PostgreSQL is encroaching on MongoDB’s market share, industry checks indicate that the concerns are overstated. The firm’s recent attendance at a Postgres user conference and discussions with private companies, developers, and technologists have reinforced their stance. They observed a resurgence in demand for Postgres, attributed to extensions and tooling that simplify its use, which appears to be more about modernizing existing MySQL and Oracle (NYSE:ORCL) applications rather than displacing MongoDB.

RBC Capital’s collaboration with RBC Elements™, their in-house data science team, involved analyzing alternative data sources such as GitHub repositories and job postings. This research was aimed at assessing the underlying usage of both Postgres and MongoDB technologies. The findings from this data support the belief that both databases are performing well in the market.

The firm’s analysis suggests that the majority of Postgres usage is focused on updating legacy applications, which does not directly compete with MongoDB’s offerings. The alternative data indicates that MongoDB continues to maintain its strong position in the NoSQL database segment.

RBC Capital has expressed confidence in MongoDB’s market position and growth prospects, underlined by their maintained Outperform rating and $400 price target. The firm’s outlook is based on the assessment that MongoDB’s stock offers a compelling opportunity, with investor concerns around PostgreSQL competition being overestimated. While MongoDB’s current valuation appears slightly above the InvestingPro Fair Value, the company maintains strong financial health with a current ratio of 1.7 and more cash than debt on its balance sheet. For deeper insights into MongoDB’s valuation and growth prospects, including access to 10+ additional ProTips and comprehensive financial analysis, visit InvestingPro.

In other recent news, MongoDB, Inc. reported several significant developments. The company announced the appointment of Srdjan Tanjga as the Interim Chief Financial Officer, following the departure of Michael Gordon. This leadership change was detailed in a recent SEC filing. MongoDB has also partnered with Swiss bank Lombard Odier to enhance banking systems with generative AI, significantly speeding up code migration and application modernization. This collaboration is part of Lombard Odier’s ongoing GX Program aimed at modernizing its banking application architecture.

In financial maneuvers, MongoDB completed the redemption of its 0.25% Convertible Senior Notes due 2026, issuing shares to note holders who opted to convert their notes. Additionally, Cantor Fitzgerald initiated coverage on MongoDB with an Overweight rating, citing a bullish outlook and highlighting the potential for mid-20% revenue growth in fiscal year 2025. Guggenheim also upgraded MongoDB’s stock rating to Buy, expecting balanced growth and setting a price target of $300. The firm noted stable Atlas (NYSE:ATCO) consumption trends and strategic investments in Enterprise Advanced and hybrid environments. These developments reflect MongoDB’s strategic moves and market position as it navigates the current business landscape.

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