Well if you’ve never heard of MongoDB before Friday, then you’re sure as heck gonna know about them now, because they just dropped an earnings report that had Wall Street foaming at the friggin mouth. 

(Source: Giphy) 

You see, despite this data software “up and comer” being down -24.21% YTD, their latest earnings drop had investors stepping over themselves Friday as the stock roared to a peak of +18% for the day. 

(Source: Seeking Alpha) 

The reason for the cigar lighting came from MongoDB posting a 13% year-over-year revenue boost, raking in $478.11 million. For those of you keeping score, that’s $14 million more than analysts were expecting—because, apparently, Wall Street’s crystal ball was on the fritz again. Most of this growth came courtesy of MongoDB’s Atlas platform (aka, the cloud-based database that’s got every tech bro and their dog salivating over its AI-ready capabilities), which saw a 27% revenue jump. 

(Source: Futurum Group) 

However, even with the impressive revenue growth, it wasn’t all “fun coupons” as Jordan Belfort likes to remind us. For instance, MongoDB’s net income took a nosedive, plummeting by a whopping -45.04% year-over-year. That’s right, while revenue was up, profits were down, down, down. Their net profit margin also took a slap to da face, dropping by -28.64%, while operating income cratered by -45.79%. Meaning, it looks like someone forgot to tell MongoDB that revenue growth doesn’t mean much if you’re bleeding cash like a startup at a free kombucha convention.

(Source: Giphy) 

Now of course, despite the financial bloodbath on the “keeping the money you make” side of the business, analysts are still out there throwing around price target upgrades like dolla bills at their favorite strip clubs. The consensus price target for MongoDB is sitting at $380.30, indicating a +30.76% upside from the stock's current $290.89 levels. 

More specifically, Morgan Stanley and Truist Financial came in on August 30th with two new upgrades as Morgan Stanley upgraded its price target to $340, hinting a +20.39% upside - while Truist Financial boosted its price target by $20 to $320 for a +30.23% upside at the time of publishing. 

(Source: The Fly) 

“Ok wait, the company beat earnings, but its net income is about as useless as a screen door on a submarine… Why all the love?”

Good question. In explanations that are zero percent surprising to pretty much everyone, the hype is all centered around AI baby (shocker). 

(Source: Giphy) 

According to analysts MongoDB is sitting pretty in the AI and cloud markets, and analysts are betting the farm that MongoDB’s flexible, scalable database solutions are exactly what companies need to tackle the growing mountain of complex data. Because nothing says "future-proof" like a database that can handle your cat videos and your AI-driven, deep-learning, neural-whatever all in one go.

(Source: Investopedia) 

In addition, analysts are also keen on MongoDB’s spending habits as the company is throwing mountains of cash into R&D and sales, hoping that innovation will pave the way to market dominance. Naturally though, some wonder if MongoDB is buying growth at the expense of, you know, actually making money - but hey, as long as cash is going towards “R&D”, that’s all the “D” Wall Street needs to get excited, amirite?

On the other hand, the technical analysis for MongoDB is also reflecting the bullish frenzy as all 16 out of 17 Stocks.News indicators are flashing “Strong Buy” like it’s Black Friday at Best Buy - while all 15 moving averages are pointing towards uptrend continuations. 

With that said, MongoDB and its executives are definitely feeling optimistic as well.  They’ve upped their full-year revenue guidance to somewhere between $1.92 and $1.93 billion. For the next quarter, they’re expecting revenue to land between $493 million and $497 million, which lines up nicely with what analysts are expecting. 

(Source: Market Watch) 

But, but, but, before you degenerate traders start pressing the buy button on this, let’s not forget that MongoDB is trading at 93 times non-GAAP earnings—a valuation so high it could give Elon Musk vertigo. 

However, even with the disconnect between current prices and actual earnings, it’s no secret that MongoDB’s big bet is on the AI and cloud markets, where they hope to snatch up market share from competitors like Oracle. Their document-oriented database model is supposedly tailor-made for AI applications, which need to process massive amounts of unstructured data. 

(Source: Giphy) 

Meaning, in theory, this makes MongoDB the go-to for companies trying to teach machines to think—which again, is a lofty goal for a company that’s still trying to figure out how to turn a consistent profit. So with that said, while MongoDB’s recent performance is encouraging, there are a few red flags to keep in mind. 

The company’s current valuation and ongoing struggle with profitability could be a recipe for disaster if things don’t go exactly as planned - plus, when you throw in the notoriously volatile nature of tech stocks, well then, you have to ask yourself if the biscuit is worth the risk. (Just ask anyone who invested in Peloton).

(Source: Reddit) 

In my opinion, if you’re chomping at the bit to dive headfirst into MongoDB after its earnings momentum, please make sure to bring a life vest. Obviously there’s potential there, especially if you're bullish on AI and cloud, but there’s also a very real possibility that MongoDB’s spending spree might come back to bite them. 

(Source: Giphy) 

So make sure to keep an eye how they manage costs and whether they can actually start turning a profit. Because in the end, it’s not just about making money—it’s about keeping it too.

In the end, though, MongoDB's stock is a mixed bag for me. But hey, why stress your brain cells trying to decipher what MongoDB’s future outlook looks like when when the last four of our Stocks.News alerts all exploded to peak moves of +110%, +185%, +110.10%, and +300%... in LESS than 48 hours?! Incredible right? Our premium members were absolutely eating last week, and with the market closed for Labor Day tomorrow, our next alert on Wednesday, September 4th is set to be even more explosive. 

Could it be another +100% or +300% move in the making? There’s only one way to find out. Meaning, if you’re not a premium member, then what the heck are you doing? Hurry and upgrade immediately to make sure you get in on next week's action!

In the meantime, stay safe and stay frosty, friends! Until next time… 

Stocks.News does not hold positions in any companies mentioned in the article.