MongoDB (NASDAQ:MDB), a development and general-purpose database company for consulting and training, has been extremely buzzworthy recently. Analysts have continued to give the company a Strong Buy rating due to potential new clients in needs of servers in the rapidly growing AI industry, despite overall average price targets of $367.37 indicating a 3.30% downside. In the past 3 months, 20 analysts have rated MDB and it has received 17 Buy, 2 Hold, and 1 Sell ratings.
Reasons Analysts are Recommending MongoDB
There are a multitude of reasons why analysts are recommending MongoDB despite the current implied downside. AI is growing unlike ever before. According to Grand View Research, between 2023 and 2030 the AI Market is expected to grow at a CAGR of 37.3%, ultimately reaching $1.811 trillion in 2030. The rise of AI platforms has created a dire need for better software capabilities, which is where MongoDB is able to step in and provide server solutions. MongoDB has various products including Atlas, Enterprise Advanced, and Community Edition to provide server solutions to all customers and adapt to their AI needs.
For example, Concured, an AI startup focused on content personalization, has decided to use MongoDB as their company’s server to launch new products and platforms. The MongoDB Atlas Serverless platform that MDB sells allows customers to confidently grow their businesses and take on the tech industry. There are many more opportunities similar to Concured for MongoDB to expand, causing investors to see high potential for growth despite the downside from price targets.
MongoDB vs. Competitors
After recently reporting earnings on June 1, 2023, MongoDB’s EPS soared to .56, which was significantly above the forecasted EPS of .18. Additionally, the quarterly revenue is now reporting at $368.28M for April 2023, opposed to the previous report of $361.31M for January 2023, showing continued growth.
The company’s stock has also seen a yearly gain of 52.11%, which is significantly higher than the growth of competitors CrowdStrike (CRWD) (-5.34%), Alteryx (AYX) (-3.07%), Okta (OKTA) (-8.37%), and Salesforce (CRM) (29.71%). Furthermore, MongoDB’s recent earnings report ultimately gives analysts an indication of a positive future ahead despite the implied downside.
Conclusion
Overall, MongoDB is showing signs of positive returns despite the low implied downside. In regard to blogger sentiment, MDB sentiment is currently at 84%, while the sector average is only 67%, meaning that the stock is more bullish than the sector average.
Additionally, according to TipRanks’ technical analysis MongoDB is considered a Buy. Moreover, this stock is continuously favored by analysts and has a high potential for future growth.
