Guggenheim Upgrades MongoDB (MDB) to Buy

Guggenheim analyst Howard Ma upgraded MongoDB (NASDAQ: MDB) from Neutral to Buy with a price target of $300.00.

The analyst comments "Key Message: We’re upgrading MDB shares from Neutral to Buy and introducing a $300 DCF-based PT (about 22% upside), which implies 10.1x EV/NTM Rec Rev and 9.3x EV/FY26 Total Rev. MongoDB seems more like the ugly duckling in infrastructure software as of late than the soaring eagle it’s long been. Shares are down 30% since F3Q25 earnings on 12/9 vs. IGV down 6%. The bear case on MongoDB is that Atlas consumption has been decelerating instead of improving as many investors expected, while non-Atlas (primarily EA) outperformance will create growth headwinds, or even worse, cannibalize Atlas growth and slow the pace of MongoDB’s TAM penetration. Also, increased investments could suppress margins, while a well-respected CFO/COO is leaving. We contend that these concerns are overblown. Rather, Atlas consumption trends have been stable, and by our measure of New ARR (i.e., incremental y/y consumption), F3Q accelerated modestly vs. F2Q as measured on a 2-year stack. Our most recent channel check indicates that 4Q consumption accelerated vs. 3Q, and assuming stable consumption in FY26, we see Atlas accelerating to 29% growth vs. +27% in FY25 (or 1 pt of deceleration ex. unused commits). Meanwhile, management is deliberately investing in EA and its “run anywhere” strategy to meet demand for running both core business apps and new AI workloads in hybrid environments, which we believe will drive sustainable low teens EA growth and improve MongoDB’s TAM capture. Lastly, we believe FY26 total revenue guidance will likely start near 15% again, similar to the last two years, a prudent approach, in our view. In our plausible revenue scenario, we see MongoDB ultimately growing 24% and producing upside closer to FY24 than FY25. In other words, we’re not assuming MongoDB soars like an eagle again, but rather gracefully maneuvers the future while giving investors balanced growth AND expanding margin. We believe that should be enough for shares to outperform on a relative basis."

For an analyst ratings summary and ratings history on MongoDB click here. For more ratings news on MongoDB click here.

Shares of MongoDB closed at $246.39 yesterday.

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