Guggenheim sees stronger MongoDB revenue on faster Atlas growth

Investing.com -- Guggenheim expects MongoDB to post faster growth in its Atlas cloud database service in the current quarter, helping the company deliver revenue and profit ahead of Wall Street estimates and raise its full year outlook.

The broker said it now forecasts Atlas revenue to grow 31% in the fiscal third quarter, up from 29% in the prior quarter, supporting about 18% total revenue growth.

That would be roughly 5% above consensus and leave room for operating income to beat expectations. Guggenheim also expects the company to guide fourth quarter revenue growth of 16 to 17%, above the 14% analysts model.

The firm said checks with a major hyperscale partner point to heavier MongoDB spending in recent months after a slower first half, suggesting the company has been adding capacity in anticipation of higher usage.

It said the mix of spending has shifted toward compute rather than storage, which indicates rising use of newer functions such as vector search and real time analytics.

Guggenheim’s model calls for total revenue of about 626 million dollars in the fiscal third quarter, 5 percent above consensus, with Atlas revenue exceeding estimates by about 4%. It expects fourth quarter results to also land above consensus even if management guides conservatively.

For the full fiscal year, Guggenheim expects MongoDB to lift guidance to 19 to 20% growth from the current midpoint of about 17%. Its scenario points to revenue growth of roughly 22%, with both Atlas and non Atlas segments topping estimates and margins rising at least 100 basis points.

The broker set a $400 price target, based on a discounted cash flow model.

You May Also Be Interested In

• MongoDB (MDB) call put ratio 2.7 calls to 1 put with a focus on September 4 weekly options into quarter results
• MongoDB (MDB) PT Raised to $465 at DA Davidson Ahead of Q2 Results
• Trump weighs "mow the lawn" strategy to counter Iran in Strait of Hormuz