MongoDB climbs as Wall Street applauds 'generally positive' Q2 results, guidance

MongoDB (NASDAQ:MDB) shares gained more than 5.5% in pre-market trading on Friday after the developer and database company reported second-quarter results and guidance that were seen as “generally positive” by Wall Street.

Mizuho Securities analyst Matthew Broome kept his neutral rating on MongoDB (MDB) shares but raised his price target to $260 from $240, noting that Atlas revenue growth was “relatively strong,” but there were some concerns that most of the incremental upside to estimates was the result of non-Atlas business and thus, unlikely to be repeated.

For the period ending July 31, the Dev Ittycheria-led MongoDB (MDB) said it earned an adjusted 93 cents per share on $423.8M in revenue.

The company’s Atlas database saw exceptional strength in the period, as revenue for the segment rose 38% year-over-year during the period. Atlas accounted for 63% of total revenue in the period, MongoDB said.

Additionally, Mizuho’s Broome added that while the company is executing in a strong manner, it’s still operating in a “challenging” environment and is unlikely to see any “meaningful” near-term catalyst from generative AI.

JMP Securities analyst Patrick Walravens maintained the firm’s outperform rating on MongoDB (MDB) shares and bumped his price target to $440 from $425, citing the strong results from Atlas, as well as the much higher adjusted operating margin during the quarter, which clocked in at 19%.

William Blair analyst Jason Ader said the company’s “exceptional leverage” and enterprise advanced model helped it perform strongly.

“While the stock trades at a rich EV/sales multiple of 16 times on our calendar 2024 estimates, we see room for continued upside, especially as Atlas consumption should return to more normalized levels once the macro recovers, Mongo is well-positioned to benefit from generative AI tailwinds, and profit margins continue to expand,” Ader, who has an outperform rating, explained in a note.