Database management company MongoDB (NASDAQ:MDB) has gained importance on the back of rapid digitization and technological transformation. However, rising Treasury yields have raised investor concerns about the tech industry's growth prospects, leading the company's shares to decline 12.7% in price over the past month. So, considering MDB's underwhelming financials and premium valuation, is it worth betting on the stock now? Read on to learn more.MongoDB Inc. (MDB), which is headquartered in New York City, is a leading modern, general-purpose database platform built to maximize the potential of software and data for developers and the applications they build. The stock has gained 45.6% in price over the past year by capitalizing on the rapid digital transformation and business organizations’ high dependence on cloud collaboration platforms to process large volumes of business data and enhance scalability.
However, the company's shares have declined 12.7% in price over the past month due to the sell-off of technology stocks last month on rising interest rates. Higher 10-year Treasury yields have been a matter of concern for tech investors because rising interest rates reduce the long-term growth potential of fast-growing technology businesses.
In addition, the industry's strong growth prospects are fostering fierce competition among existing and new players. Investors' optimism surrounding the industry's growth has led the stock of several industry participants, including MDB, to hit valuations that are not in sync with their current or projected financials. Furthermore, with U.S. Treasury yields rising ahead of the Federal Reserve's December policy meeting, MDB's shares may suffer in the near term.