This Quiet Tech Company Is Ahead Of Microsoft, Amazon, Bernstein Says: Is It A Buy?

Database vendor Mongodb Inc MDB has caught the attention of analysts at Bernstein who initiated coverage on the company this week.

Known for its flexible and intuitive approach to data organization, MongoDB is set to report its financial results for the fourth quarter and full year on March 8 after the market closes.

Here’s what investors need to know.

The MongoDB Analyst: Firoz Valliji initiated coverage of MongoDB with an Outperform rating and $282 price target.

The MongoDB Takeaways: Bernstein is confident that MongoDB can sustain growth despite the presence of more prominent players in the market like Microsoft Corp MSFT and Amazon.com, Inc AMZN, as it is ahead of both companies in terms of its technology, Valliji said in the initiation note. 

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MongoDB is capitalizing on the explosive growth in data and the rise of new types of workloads created around them, the analyst said.

The market is broad, with a predicted 24% CAGR growth rate from 2021 to 2025, reaching $37 billion in 2025, he said. 

MongoDB has a revenue run rate of approximately $1.3 billion and is growing off a small base, so growth in line with the market will be significant without requiring any significant market share gains, Valliji said.

Despite profitability being a concern, the analyst said this is already baked into expectations. MongoDB will need to maintain its aggressive OPEX spending to maintain its product differentiation and drive growth, he said. 

The Street is underestimating MongoDB's growth near-term, Valliji said.

MongoDB is expected to grow approximately 33% for FY24 and FY25, compared to about 45% in FY23, which is the current fiscal year. Bernstein's forecast is 6% and 10% above consensus for FY24 and FY25, respectively.

With the expectations being low, there is an upside opportunity for MongoDB in the near term, as it could surprise the Street on the upside.

MDB Price Action: Shares of MongoDB were trading down 3.57% at $209.58 Friday afternoon, according to Benzinga Pro.

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