UPDATE: Tigress Financial Partners Starts MongoDB (MDB) at Buy
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Tigress Financial Partners analyst Ivan Feinseth initiates coverage on MongoDB (NASDAQ: MDB) with a Buy rating and a price target of $630.00.
The analyst comments "We are initiating research coverage on MDB with a Buy rating and a 12-month target price of $630 as it continues to experience strong growth trends driven by the success of its DBaaS (database-as-a-service) business model which is driving rapid enterprise adoption and revenue growth. MDB continues to experience strong growth trends driven by the success of its Atlas (database-as-a-service) revenue and further product enhancements. MDB recently introduced MongoDB 5.1 with new product enhancements such as Atlas Serverless, Live Resharding, Versioned API, and native time series support. MDB continues to experience significant quarterly and annual revenue growth and recently reported another strong quarter of results, with Q3 revenue increasing 50% Y/Y to $226.9 million. Subscription revenue increased 51% Y/Y to $217.9 million, and services revenue increased 35% Y/Y to $9 million. MDB reported $158.4 million in gross profit driven by a 70% gross margin. Atlas Revenue grew 84% Y/Y, representing 58% of total Q3 revenue, and continues to see success across a wide variety of industries and use cases, which positions MDB to build deeper relationships with customers over time. MongoDB 5.1 brings users time series support for sharing, improved capabilities for sophisticated analytics on real-time data, and enhancements to ClientSide Field Level Encryption. MDB also announced a preview of a new facet operator in Atlas Search, making workloads including e-commerce product catalogs and content libraries run significantly faster. Atlas for Government reached “in-process” FedRAMP designation with the HHS. MDB will continue to benefit from the growth of its Atlas subscription database product. Atlas is now more than half of total revenue, doubling from over a year ago. The company should continue to see accelerating growth as more enterprises expand their cloud-based data management and infrastructure. MDB works with large data sets and runs both onpremise and on all major cloud-hosted environments. In addition, Atlas for Government received approval as FedRAMP Ready For Agency Authorization, providing the simplest way to deploy, operate, and scale MongoDB in a FedRAMP-ready environment to help customers meet data security and privacy standards. The company should continue to see accelerating growth as more enterprises expand their cloud-based data management and infrastructure. MDB’s subscription-based revenue model will drive an ongoing acceleration in Business Performance trends which will drive an increasing Return on Capital, leading to significant gains in Economic Profit and long-term shareholder value creation. We believe further upside in the shares exists, and our 12-month target price of $630 represents a potential return of nearly 40% from current levels."
Shares of MongoDB closed at $450.60 yesterday.
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