On Tuesday, Mizuho (NYSE:MFG) Securities adjusted its outlook on MongoDB , Inc. (NASDAQ: NASDAQ:MDB) stock, a leading database platform provider, by increasing the price target on the company's shares to $320 from the previous $275.
The firm has decided to maintain its Neutral rating on the stock despite the adjustment. According to InvestingPro data, MongoDB currently trades at $350.13, above Mizuho's target, with technical indicators suggesting overbought conditions.
MongoDB recently announced its financial results for the third fiscal quarter, reporting revenues of $529 million, marking a 22% year-over-year increase. This figure surpassed the consensus revenue forecast of $497 million, which predicted a 15% year-over-year growth.
The company's stronger-than-anticipated performance was attributed to robust Enterprise Advanced (EA) activity, which included approximately $15 million from multi-year term license agreements.
Additionally, MongoDB's Atlas (NYSE:ATCO) revenue, its fully managed cloud database service, grew by 26% year-over-year, albeit at a decelerated pace. InvestingPro analysis reveals impressive fundamentals, including a robust gross profit margin of 74% and strong liquidity with a current ratio of 5.03.
In light of the recent performance, MongoDB has revised its revenue growth guidance for fiscal year 2025. The company now projects a midpoint revenue growth of 17.3%, an increase from the previously anticipated 14.5%. Strategically, MongoDB is shifting its focus towards enterprise customers and away from the mid-market segment. To support this strategic direction, the company is reallocating sales and engineering resources.
Furthermore, MongoDB has announced that Michael Gordon, the company's Chief Financial Officer and Chief Operating Officer, is set to step down from his roles on January 31, 2025.
While the potential for AI to contribute to MongoDB's revenue is not expected to materialize in the near term, management remains optimistic about the company's positioning to capitalize on AI-driven growth over a longer-term horizon.
For deeper insights into MongoDB's financial health and growth prospects, InvestingPro subscribers can access comprehensive analysis including 15+ additional ProTips and detailed financial metrics in the Pro Research Report.
Mizuho's revised price target of $320 reflects a next twelve months (NTM) enterprise value to revenue multiple of 11 times. The firm reiterated its Neutral stance on MongoDB's stock, citing valuation as the basis for this rating.
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