MongoDB (NASDAQ:MDB) delivered significant gains during the early phases of the tech rally as it recovered from late-2022 lows. However, the steam ran out in early 2024, and it has been one of the worst-performing software stocks since then. It declined even more today. Here’s what you need to know:
The primary catalyst for MDB stock declining today is the company’s weaker-than-expected guidance for fiscal 2026. It overshadowed its strong Q4 FY2025 results.
MongoDB expects $2.24 billion to $2.28 billion in FY2026 revenue vs. consensus estimates of $2.33 billion.
EPS guidance also came in much lower than expected. MongoDB expects $2.44 to $2.62 vs. the $3.39 consensus.
This is mostly due to MongoDB securing unusually large multi-year deals in FY2024 and FY2025. These deals inflated the “renewal base,” and with contracts expiring in FY2026, investors are spooked.
The guidance was missed, but its Q4 performance was solid. Revenue grew 20% year-over-year to $548.4 million and beat estimates by $27.8 million.
Revenue from its cloud database platform also grew 24% year-over-year and now accounts for 71% of its total revenue. Its non-GAAP operating margin expanded to 21%.
Despite the decline, MDB stock still changes hands at a rich forward earnings multiple of 93x. That said, both earnings and revenue growth are expected to be solid in the coming years.
EPS is expected to grow from $2.83 in FY2026 to $6.32 in FY2029, Revenue is expected to grow from $2.3 billion in FY2026 to $3.65 billion in FY2029 and $6.6 billion in FY2033.
The consensus price target of $340.52 implies 61.5% upside potential.
