MongoDB Atlas Revenue 'Solid,' AI Integration Set To Drive Strong Cash Flows: Analysts

MongoDB, Inc MDB stock climbed on Friday after the company reported upbeat second-quarter earnings on Thursday.

The company reported quarterly sales of $478.1 million, up 12.8% year-on-year. It topped analyst consensus estimates of $464 million. The quarterly earnings of 70 cents per share beat the analyst consensus estimate of 49 cents.

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

• RBC Capital analyst Rishi Jaluria reiterated MongoDB with an Outperform and a $350 price target.
• Stifel analyst Brad Reback maintained a Buy and raised the price target from $300 to $325.
• Truist Securities analyst Miller Jump reiterated a Buy and raised the price target from $300 to $320.
• Piper Sandler analyst Brent Bracelin maintained an Overweight and raised the price target from $300 to $335.
• Goldman Sachs analyst Kash Rangan reiterated a Buy rating with a price target of $340.
• JMP Securities analyst Patrick Walravens maintained an Outperform rating and a $350 price target.

RBC Capital: MongoDB reported a good beat-and-raise quarter, leading shares up 13% after market close, Jaluria noted. Atlas’ revenue was solid. Margins and EPS upside were solid, and Jaluria raised his estimates.

Most importantly, the analyst flagged that consumption trends improved, operational headwinds subsided, and new business generation was strong. Jaluria noted that the second quarter was a good outcome, and fiscal 2025 is back on track.

Considering MongoDB’s large TAM, powerful secular drivers, and category leadership, the price target implies a premium to the peer group.

Jaluria expects third-quarter revenue and EPS of $495 million and 66 cents.

Stifel: MongoDB posted a solid rebound quarter. A 3% revenue beat was driven by consumption growth that modestly outperformed expectations and solid improvement in new business execution across Enterprise Advanced and Atlas, sending the stock up ~14% after hours after being down ~40% year-to-date, Reback noted.

The analyst said results highlight improving execution in the challenged macro, which, combined with investments that should support gross margin expansion and an expanding set of core and emerging growth drivers, should enable the company to sustain 20%+ revenue growth and incremental levels of profitability and cash flow in coming years.

Reback expects third-quarter revenue and EPS of $496.1 million and 68 cents.

Truist Securities: MongoDB produced second-quarter results that indicated some stabilization in the business after a shaky start to the year, Jump noted. From an execution perspective, the management team pointed to an improvement in new business as a sign of their operational rebound.

From a macro perspective, consumption patterns in the quarter uptick slightly from the first quarter but are not enough to change the company’s expectations for the remainder of the year. Jump expects the company to reaccelerate revenue growth by about 17% annually and scale to a 23% free cash flow margin by then.

Jump expects third-quarter revenue and EPS of $495 million and 68 cents.

Piper Sandler: The solid beat-and-raise suggests the worst of a two-year growth moderation is now behind MongoDB, Bracelin noted. The second-quarter top-line growth could mark a near-term quarterly trough, setting up for accelerating growth into next year.

Bracelin expects further growth normalization back above the 20%+ range exiting next year, even with little benefit from artificial intelligence, another upside lever. The analyst adds that MongoDB remains a high-quality and profitable growth compounder with a modern cloud database facing favorable secular tailwinds that could help double revenue to $4 billion-$5 billion in three to five years.

Solid execution, as evident by the quarterly beat-and-raise and underlying Atlas momentum, further increases Bracelin’s conviction that growth investors rebuild core positions in MongoDB.

Bracelin expects third-quarter revenue and EPS of $495.2 million and 68 cents.

Goldman Sachs: MongoDB is well positioned to benefit from the growth of generative AI as their document model is best-in-class at processing rich, complex data structures quickly, and with more AI applications and data ultimately increasing the demand for Databases, Rangan noted. The analyst remains confident in MongoDB’s ability to win an outsized share of the $100 billion+ database market that can support durable 20% growth mid-term.  

Rangan expects third-quarter revenue and EPS of $$495 million and 67 cents.

JMP Securities: The rating followed the company, indicating healthier new business trends and Atlas strength. The company reported better-than-expected second-quarter results. The price target reflects a premium to the high-growth infrastructure peer group median multiple, which is warranted by MongoDB’s attractive market opportunity and strong leadership team.

Walravens expects third-quarter revenue and EPS of $496 million and 68 cents.

Price Action: MongoDB stock traded up 16.75% at $286.87 at last check Friday.

Now Read:

• Chipmakers Tick Up As Nvidia Halts Sell-Off, Dollar Rises As Traders Revise Fed Wagers: What’s Driving Markets Friday?

Image: Shutterstock