MongoDB stock jumped in Thursday trading after the database software company reported stronger-than-expected quarterly results. MongoDB's results showed the slumping stock is "finding its AI mojo," Wedbush analyst Dan Ives wrote in a client note.
Revenue for the New York-based company increased 22% year over year to $549 million for its April-ended quarter, MongoDB said in a news release late Wednesday. Analysts polled by FactSet were projecting sales of $528 million. Adjusted earnings nearly doubled to $1 per share for the fiscal first quarter, well ahead of consensus estimates for 66 cents.
MongoDB Chief Executive Dev Ittycheria called out a "strong start" to the company's fiscal year in the news release, with its Atlas cloud subscription database product growing sales 26%. That marked an acceleration from the 24% growth the company reported a quarter earlier.
The company also bumped up its sales guidance for the January 2026-ending fiscal year. MongoDB expects $2.27 billion in annual sales, based on the midpoint of its range, compared to a previous $2.26 billion.
On the stock market today, MongoDB stock gained 12.8% to close at 225.38. Shares pushed close to the company's 200-day moving average. MongoDB stock has traded below that long-term trendline since early March.
'Step In The Right Direction'
MongoDB says it has more than 50,000 customers, including 70% of the Fortune 100, for its database software. It competes against Oracle, smaller startup database players and offerings from cloud giants like Amazon and Microsoft.
Optimism that data-hungry AI will power strong demand for its next-generation database software powered a more than 200% rally for MongoDB stock from late November 2022 to February 2024. But shares have slumped deeply since, down more than 60% from a February 2024 high near 507.
Wednesday's results break a troubling trend for MongoDB stock. Shares had sold off following its previous two earnings reports in March and December.
"This quarter was a step in the right direction for MongoDB as the company is still in the early innings of Atlas monetization, which is starting to make up a larger portion of the pipeline moving forward with MongoDB well-positioned to emerge as a winner in the AI revolution," Wedbush's Ives wrote.
Ives reiterated an outperform rating and price target of 300 for MongoDB stock.
William Blair analyst Jason Ader said the MongoDB report will bring a "sigh of relief" for those bullish on the stock. He highlighted the company's commentary that the consumption-based growth of Atlas rebounded in May after slowing amid the broader market uncertainty in April. Consumption-based software products charge based on total usage of the software.
"We believe this quarter should buoy investor confidence in the durability of MongoDB's growth runway, particularly as Atlas growth stabilizes (and potentially reaccelerates), and in the opportunity to show meaningful operating margin expansion as the business scales," Ader wrote in a client note. He reiterated an outperform call.
MongoDB Stock: Technical Ratings
The post-earnings rally adds to a stronger recent run for MongoDB stock. Shares gained 10% in May and were ahead 5.8% so far this month coming into the report. Still, MongoDB stock remains down about 3% year-to-date, with the worst of its slide coming in March.
Coming into the report, MongoDB stock had an IBD Composite Rating of 63 out of 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating. The best growth stocks have a Composite Rating of 90 or better.
And the stock's Relative Strength Rating was a meager 11 out of 99. The RS Rating means that MongoDB stock has outperformed just 11% of all stocks in IBD's database over the past year.
