MongoDB (MDB) Soars After Topping Q1 Views, Analysts Positive but Cautious as Long-Term Competitive Concerns Remain
Shares of MongoDB (NASDAQ: MDB) are up more than 8% in pre-open trading Friday after the tech company reported better-than-expected results for its Q1.
MDB said it made a loss of $0.25 per share on sales of $181.6 million which compares to the expected loss of $0.36 per share on sales of $169.8 million.
"MongoDB delivered an excellent start to fiscal 2022, highlighted by 73% growth of Atlas. Five years ago this month we launched Atlas with the idea that customers would value a fully managed MongoDB database as a service offering from the company that built MongoDB. Today, Atlas is nearly a $400 million revenue run rate business, and represents, for the first time, the majority of our revenue," said Dev Ittycheria, President and Chief Executive Officer of MongoDB.
"These results are strong validation for a modern data application platform that empowers developers to rapidly build flexible and highly scalable applications across a broad range of use cases. MongoDB's strong product-market fit, as evidenced by the wide variety of customers, from cutting-edge start-ups to the world's largest businesses, puts us in a great position to continue to generate high growth at scale."
For the current quarter, the company is projecting sales between $180 million and $183 million, with the midpoint of $181.5 million coming in slightly higher than the expected $181 million.
Needham analyst Jack Andrews saw many positives in the “strong” quarter and therefore hiked the price target to $415.00 per share from $409.00 per share on the Buy-rated stock.
“MDB reported strong 1QFY22 results as revenue was well ahead of consensus and the mid-point of guidance for FY22 was raised by $22.5 million. In our view, Atlas continues to propel results as growth accelerated for the second consecutive quarter to 73%, and Atlas now represents 51% of total revenue. Enterprise customers also appear to be increasing their adoption of Atlas due in part to its data platform capabilities, which is leading to higher >$100k customer growth. Atlas' revenue is primarily sourced by the self-service channel, but most expansion revenue is driven by direct sales in a highly economical model. MDB remains one of our favorite ideas given that several quarters of strong customer adds and the faster-growing Atlas have set a flywheel in motion for MDB to achieve high levels of sustained growth,” Andrews said in a note.
Mizuho’s Matthew Broome also praised the company for “good” results, but he remains cautious as long-term competitive concerns remain. He recently initiated coverage of MDB at “Neutral,” while he raised the price target to $300.00 per share from $265.00 per share.
“In our view, MDB provides a best-in-class database-as-a-service that offers a differentiated focus on developers and cloud. However, revenue deceleration has started to become a concern, and the co. faces strong competition, which may limit its profitability over the long-term,” he said in a memo.