MongoDB (MDB) Tops Earnings and Revenue Estimates, Analysts' Reaction Mixed Amid a Weaker Guidance
MongoDB (NASDAQ: MDB) reported better-than-expected fourth-quarter results for earnings and revenue but reported it expects to record a higher-than-expected loss in Q1.
Shares of the company trade 1.6% higher in pre-open after initially surging 3% following the Q4 report.
The software business said it lost $0.33 per share in the quarter to end-January to top the expected $0.39 from analysts. The company is yet to become profitable.
Revenues for the quarter were reported at $171 million, again higher than the Street consensus of $157 million.
"MongoDB's fourth quarter performance was a strong finish to an incredibly successful year. Our performance in fiscal 2021 demonstrated the increasingly strategic role MongoDB's modern application data platform plays in enabling customers to use software and data to derive a competitive advantage," said Dev Ittycheria, President and Chief Executive Officer of MongoDB.
For the current quarter, MDB said it expects to record revenues in a range of $167 million to $170 million with the midpoint higher than the $166.8 million expected from market analysts. However, investors were disappointed to hear that MDB is projecting a loss in the range of $0.39 and $0.36 per share, while the Street consensus was negative $0.27 per share.
"As we look ahead to fiscal 2022, MongoDB is in an excellent position to benefit from the shift to the cloud and the need to build smarter and more powerful applications that transform a company's business.”
Morgan Stanley analyst Sanjit Singh praised the company’s performance in the past quarter but still lowered the price target on the Overweight-rated MDB to $415.00 per share from $439.00 amid a lower earnings guidance.
“While the pandemic clearly impacted both new customer revenue and expansion business among Atlas customers, MongoDB navigated the crisis well and ended up delivering 40% growth for the year including 39% subscription revenue growth in Q4 which was 9% ahead of consensus,” Singh wrote in a note sent to clients today.
“At this time last year, MongoDB ended FY20 having posted 44% revenue growth. However, with the world entering the early stages of the global pandemic, management provided an initial FY21 revenue outlook calling for growth of just 21-26% YoY.”
Needham’s Jack Andrews is more positive on MDB compared to his Morgan Stanley colleague, raising the PT to $409.00 per share from prior $394.00.
“MDB continues to favorably execute against its large database market opportunity as the company maintained its near record levels of new customer adds and reported an acceleration of Atlas growth. Management also highlighted how more customers are pivoting to a "lift and transform" strategy that should create a long-lived tailwind as these accounts expand due to the ability of MongoDB's document-based technology to flexibly address a myriad of new use cases,” Andrews said in a memo on the Buy-rated MDB.
“MDB remains one of our favorite ideas as overall growth reacceleration should come into focus, given that several quarters of strong customer adds have seeded a new flywheel for growth and the faster-growing Atlas is set to become the majority of revenue.”