/Database Software Disruptor MongoDB Gets More Wall Street Attention

Database Software Disruptor MongoDB Gets More Wall Street Attention

MongoDB stock got a rating of outperform as a Wall Street analyst initiated coverage on the database software company Friday, but shares fell along with the market.




X



MongoDB (MDB) is disrupting the $30 billion operational database software market, which has seen little innovation for decades, William Blair analyst Jason Ader said in a note to clients.

“The main drivers of disruption have been cloud computing and open-source software — which together have revolutionized how applications are built, where they are located, and how they interact with their underlying data,” Adler wrote.

MongoDB has an open-source software strategy with a software-as-a-service business model. It uses a subscription-based model for revenue.

MongoDB stock followed the market down Friday, falling 1.2% to close at 152.76 on the stock market today. The stock hit a record high of 154.64 on Wednesday.

MongoDB’s Double-Digit Growth

The company reported fourth-quarter earnings after the market close on March 13 that smashed expectations. MongoDB stock catapulted 25.6% the following day as several analysts raised their price targets. Fourth-quarter revenue jumped 71% to $85.5 million. That maintained a string of double-digit growth per quarter going back four years, though the company has yet to show a profit.

The company held its initial public offering in October 2017, pricing shares at $24. MongoDB stock jumped 34% on its first day of trading.

It added 5,100 new customers in the fourth quarter, raising the total to 13,400.

“MongoDB is investing aggressively to win a footprint in a large, fast-evolving space, and we expect strong top-line growth to be sustained for the next several years,” Adler wrote. He does not expect profitability to arrive for a few years.

“We believe MongoDB can become a multibillion-dollar revenue business over time,” Ader said. “The company has clearly established critical mass with best-of-breed technology and execution, and has separated itself from the crowded field of upstart database vendors.”

YOU MIGHT ALSO LIKE:

IBD’s Investing Podcast Has Exclusive Trading Tips, Market Insights

Get Free IBD Newsletters: Market Prep | Tech Report | How To Invest

IBD Stock Of The Day

What Makes IBD Unique?

The Big Picture By Investor’s Business Daily

The post Database Software Disruptor MongoDB Gets More Wall Street Attention appeared first on Investor's Business Daily.