MongoDB (MDB) is tumbling 24% after the company delivered stronger-than-expected fourth-quarter results but provided full-year guidance that came in below analysts’ average estimates.
Investment bank Piper Sandler slashed its price target on the shares but kept an Overweight rating on the name.
MDB provides a cloud-based database and a commercial database server.
A database administrator managing a large database, ensuring the client’s data is secure.
The Highlights of MDB’s Q4 Results and Full-Year Guidance
MDB’s revenue jumped 20% versus the same period a year earlier to $548.4 million, versus analysts’ average estimate of $519.84 million. The company reported Q4 EPS, excluding certain items, of $1.28, well above the mean outlook of 67 cents.
On the guidance front, the company expects its full-year revenue to come in at $2.24 billion to $2.28 billion, below analysts’ mean outlook of $2.33 billion. Further, it provided EPS guidance, excluding certain items, of $2.44 to $2.62, compared with the mean estimate of $3.38.
MDB’s Comments
The company indicated that it expects its businesses aside from its Atlas, its managed-cloud database, to struggle this year.
“We expect our non-Atlas business will represent a meaningful headwind to our growth (this year) because we expect fewer multiyear deals and because we see that historically, non-Atlas customers are deploying more of the incremental workloads on Atlas,” said CEO Dev Ittycheria.
Piper Sandler’s Take
The investment bank cut its price target on the shares to $280 from $425. MDB’s guidance “shakes our confidence in the durability of” its market share increases, the investment bank stated. Piper is also now less confident in the company’s “near-term” positive catalysts.
While we acknowledge the potential of MDB, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MDB but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. This article is originally published at Insider Monkey.
