MongoDB Reports Strong Q4, Yet Cautious on Future Guidance

MongoDB's Fourth Quarter Performance

MongoDB Inc (NASDAQ: MDB) witnessed a turbulent start to the trading day recently, as shares dropped considerably despite the company reporting strong results for the fourth quarter.

The company's earnings reflect positively in a generally encouraging earnings season, revealing insights that analysts have taken note of.

Analyst Insights on MongoDB

Wedbush analyst Daniel Ives reaffirmed an Outperform rating on MongoDB but adjusted the price target significantly downwards from $360 to $300. According to Ives, the company achieved impressive total revenues of $548.4 million in Q4, marking a robust 20% year-on-year growth that surpassed expectations of $520.6 million. Subscription revenue also showed promising figures, reaching $531 million compared to the forecasted $504.9 million.

However, the net recurring revenue (NRR) declined slightly to 118%, down from 120% in the previous quarter. This deceleration is attributed to a reduced contribution from existing customers. Ives also voiced concerns over the company's guidance for FY26, which appears weaker as MongoDB anticipates a gradual impact from its artificial intelligence solutions.

Fiscal Year 2026 Guidance Concern

RBC Capital Markets analyst Rishi Jaluria shared similar sentiments, maintaining an Outperform rating but lowering the price target from $400 to $320. Jaluria noted that MongoDB closed its fiscal 2025 on solid footing with non-GAAP earnings of $1.28 per share, exceeding the consensus estimate of 66 cents. Nonetheless, the year-on-year growth figures indicate a slowdown, which Jaluria highlighted, particularly with the expectation of a high single-digit decline in non-Atlas subscription revenue.

The company's strong operating profitability also stood out, yet management's fiscal 2026 guidance has disappointed the market, raising eyebrows among investors.

MongoDB's Competitive Position

Meanwhile, Rosenblatt Securities analyst Blair Abernethy reiterated his Buy rating while adjusting the price target from $350 to $305. Abernethy emphasized the year-on-year revenue growth of 19% in subscription services, amounting to $531 million, surpassing expectations. The uplift was largely driven by substantial non-Atlas multi-year contract signings of approximately $10 million.

Despite expectations for stable growth in Atlas consumption throughout fiscal 2026, Abernethy pointed out that the company's revenue guidance for the year reflects a significant non-Atlas multi-year license challenge, estimated at around $50 million.

Future Outlook for MongoDB

Needham analyst Mike Cikos also maintained a Buy rating while cutting the price target from $415 to $270. Cikos provided guidance that revenue growth for Q1 is projected to be between 16-17%, aiming for a range of $524 to $529 million and expected growth of 12-14% for fiscal 2026, translating to about $2.240 billion to $2.280 billion. However, full-year guidance falls short of market expectations of $2.328 billion.

Cikos described the anticipated drop in non-Atlas subscription revenue as a high-single-digit decline, intensifying the market's focus on Atlas, which comprises 71% of MongoDB's revenue.

Market Reaction and Future Implications

Piper Sandler analyst Brent Bracelin maintained an Overweight rating on the stock while slashing the price target from $425 to $280. He reflected on MongoDB's 19.7% year-on-year revenue growth in Q4, concluding that uncertainty looms over the future growth trajectory, which now appears below 14% for the second consecutive year.

At the end of the recent trading session, MongoDB's shares had dropped by 21.61%, trading around $207, reflecting market apprehension regarding the company’s forecast for FY26.

Frequently Asked Questions

What were MongoDB's Q4 revenue figures?

MongoDB reported total revenues of $548.4 million for the fourth quarter, showing a 20% year-on-year increase.

Who are some key analysts following MongoDB?

Analysts such as Daniel Ives from Wedbush, Rishi Jaluria from RBC Capital Markets, and others are notable for their insights regarding MongoDB's performance.

How did MongoDB's share price react to the earnings report?

MongoDB's shares decreased by 21.61% following the release of their earnings report and fiscal projections.

What is the future outlook for MongoDB?

The guidance for FY26 suggests a potential decline in non-Atlas subscription revenue, which is causing concern among investors and analysts alike.

What is the significance of Atlas for MongoDB?

Atlas represents a significant portion of MongoDB's revenue, accounting for about 71%, and is critical for driving future revenue growth.

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