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Top Analyst: Even COVID-19 Can’t Derail MongoDB’s Success

COVID-19 has wreaked havoc on companies of all shapes and sizes, but not MongoDB (MDB). Not only did the data storage company deliver a bang-up performance in fiscal Q2 2021, but it also lifted FY21 guidance.  

Digging deeper into the print, revenue hit $138.3 million, reflecting a 39.2% year-over-year gain and surpassing the Street’s $126.8 million call. Non-GAAP EPS landed at -$0.22, which was also above expectations. 

The star of the show, however, was customer additions, with MDB adding over 1,800 net customers and ending the quarter with 20,200 total customers, up from 1,400 and 18,400 in the previous quarter. On top of this, customers generating $100,000-plus of ARR and annualized MRR grew by 39, improving from 29 additions last quarter.  

What drove this impressive showing? Management pointed to strong trends in customer additions, changing sales incentives to focus on acquiring new customers and its belief that new customers can expand rapidly no matter their size.  

Commenting on the results, five-star analyst Jack Andrews, of Needham, stated, “We believe execution was superlative, as we are not aware of any other software company accelerating customer adds (record 2,500-plus sequentially) in this macro environment. Management's implied 2HFY21 outlook appears conservative, while accounting for COVID and tougher comps.” 

Adding to the good news, the company made Atlas Search, which enables text search against databases without the need to provision a separate system, generally available in June. “Although product adoption is just unfolding in the last few months, MDB noted that its customers are choosing the Atlas platform to specifically circumvent building/maintaining a separate platform for search. Although Search will not be monetized as a separate SKU, customers utilizing the feature should consume more infrastructure and increase cluster sizes,” Andrews noted.  

Realm, its mobile database that tightly couples a mobile front-end with the Atlas back-end so developers can build applications faster, is also set to be monetized by increased Atlas consumption on the back-end, in the analyst’s opinion.  

Even though MDB tells investors the pandemic could still present some headwinds, Andrews thinks “this commentary appears overly conservative.”  

Everything MDB has going for it keeps Andrews with the bulls. In addition to maintaining a Buy rating, the analyst bumped up the price target from $259 to $290. This target suggests shares could rise 35% in the next year. (To watch Andrews’ track record, click here

Looking at the consensus breakdown, 7 Buys and 4 Holds have been published in the last three months. So, MDB gets a Moderate Buy consensus rating. Based on the $284.20 average price target, shares could surge 32% in the twelve months ahead. (See MongoDB stock analysis on TipRanks

Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment. 

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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