MongoDB Shares Continue To Tank On Q3 Print: Why These Analysts Are Encouraged By Results

MongoDB Inc MDB shares tanked in early trading on Wednesday despite the company reporting upbeat third-quarter results.

The results came amid an exciting earnings season. Here are some key analyst takeaways from the earnings release.

Piper Sandler On MongoDB

Analyst Brent Bracelin maintained an Overweight rating while raising the price target from $425 to $500.

MongoDB reported its revenues higher than expected by $27 million for the third quarter, “largely driven by upside in EA,” Bracelin said in a note.

“Macro headwinds pressured Atlas growth to 36% from 38% last quarter though the magnitude of deceleration is far less severe than one year ago,” he added.

“We remain encouraged by MDB's ability to capitalize on Gen AI workloads and believe new products such as Atlas Vector Search could help drive a reacceleration in Atlas growth next year,” the analyst stated.

Needham On MongoDB

Analyst Mike Cikos reiterated a Buy rating, while lifting the price target from $445 to $495.

“MongoDB reported 3QF24 upside across all key metrics versus guidance/consensus,” Cikos wrote in a note. He added that the company is likely to benefit from improving consumption trends, “where Atlas is two-thirds of the business."

MongoDB should also benefit from new product launches, including Vector Search, and GenAI capabilities, “which reduce workload migration friction and enhance MongoDB's platform offering,” the analyst further stated.

Check out other analyst stock ratings.

Goldman Sachs On MongoDB

Analyst Kash Rangan reaffirmed a Buy rating, while raising the price target from $450 to $485.

MongoDB reported “solid” quarterly results, with subscription revenue 9% higher than the consensus estimates and operating profit margins 730 basis points above expectations.

The stock came under pressure despite MongoDB guiding its fourth-quarter revenue above Street expectations and raising its full-year operating profit margin projections from 12% to 14.4%, “which we believe is reflective of investors’ highly elevated expectations,” he added.

Oppenheimer On MongoDB

Analyst Ittai Kidron maintained an Outperform rating and price target of $480.

“Solid execution by management continues to drive the company's success in winning incremental workloads/customers, highlighting the mission-critical nature of MongoDB's platform,” Kidron said.

MongoDB should be able to “sustain its recent momentum,” by leveraging “potential for higher adoption from customers looking to modernize their data stack, new workloads ramping in usage, and new product innovations (Vector Search, Stream Processing) driving increased consumption from existing customers,” the analyst added.

William Blair On MongoDB

Analyst Jason Ader reiterated an Outperform rating on the stock.

MongoDB’s revenue beat was driven by “a strong pace of new workload acquisition (from both new and existing customers) and better-than-expected performance from Enterprise Advanced, Ader said.

“Non-GAAP operating margin of 18% was up over 12 percentage points year-over-year and benefited from a higher mix of EA revenue, slower hiring, and some deferred expenses,” he added.

“In terms of profitability, non-GAAP operating income was guided to $36.5 million at the midpoint (14% margin), down sequentially as a result of revenue seasonality and an uptick in growth investments,” the analyst further wrote.

MDB Price Action: Shares of MongoDB had tumbled 7.19% to $402.48 at the time of publication on Wednesday.

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