Shares of MongoDB (MDB) rallied 13.7% in pre-market trade on Friday after it posted a lower-than-expected loss and surpassed revenue expectations for the second quarter of Fiscal Year 2022. The company engages in the development and provision of a general-purpose database platform.
Adjusted net loss per share came in at $0.24, lower than the Street’s estimate of a loss of $0.39. The company had posted a loss of $0.22 per share in the same quarter last year.
MongoDB reported Q2 revenues of $198.7 million, up 44% from the year-ago quarter. Also, it came above $184.2 million estimated by analysts. Markedly, subscription revenue rose 44% to $191.4 million, and services revenue stood at $7.4 million, up 27% year-over-year.
The President and CEO of MongoDB, Dev Ittycheria, said, “Our introduction of MongoDB 5.0, with new product enhancements like Atlas Serverless, Live Resharding, Versioned API and native time series support, is the latest example of how we address a growing set of critical business issues for customers.”
“As a result, MongoDB is increasingly becoming a strategic technology partner and standard for customers, which supports our ability to generate attractive growth at scale for the foreseeable future,” Ittycheria added. (See MongoDB stock charts on TipRanks)
Notably, for Fiscal Year 2022, MongoDB expects to report revenues between $805 million to $811 million. The company anticipates adjusted net loss per share to be in the range of $1.20 to $1.13.
Revenues in the third quarter are expected to be in the range of $202 million to $204 million, and adjusted net loss per share is expected to be between $0.42 and $0.39.
Following the release, Needham analyst Jack Andrews assigned a Buy rating to the stock and raised the price target to $534 from $415. The new price target implies upside potential of 33% from the current levels.
Andrews said, “MDB remains one of our favorite ideas given that several quarters of strong customer adds, and the faster-growing Atlas, have set a flywheel in motion for MDB to achieve high levels of sustained growth.”
Consensus among analysts is a Moderate Buy based on 10 Buys and 4 Holds. The average MongoDB price target stands at $459.1, which implies upside potential of 14.3% from current levels.
TipRanks data shows that financial blogger opinions are 90% Bullish on MDB, compared to the sector average of 71%.
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