“Mongo had a rough start to the year, as the company faced a Macro induced consumption slowdown that was broad-based among customers, slower growth on newer workloads, and a slower new business quarter,” said Stifel analysts Brad Reback and Robert Galvin in a note.
Although MongoDB beat first quarter fiscal year 2025 revenue estimates, it was the lowest beat in company history at 2%. Full fiscal year growth guidance was also lowered to 12% from 14%.
“Post the near term outlook, we continue to believe that an expanding set of core and emerging AI growth drivers, should enable Mongo to sustain 20%+ revenue growth and incremental levels of profitability/cash-flow gains in the coming years,” Reback added.
Stifel rates the stock a Buy, but drastically reduced its price target to $300 from $425.
Loop Capital maintained its Buy rating on MongoDB while also slashing their price target to $315 from $415.
“MDB was one of the strongest growth stories last year and only experienced minimal headwinds related to cloud cost optimization headwinds,” Loop Capital said in a note. “The reasoning is that it is difficult to reduce the usage of applications that are in production.”
“Management largely blamed the macro, which seems to be an easy but unsatisfying answer,” the firm added.
Canaccord Genuity maintained its Buy rating on the stock and lowered its price target to $325 from $435.
“This is similar to how Cisco’s (CSCO) early dominance in the dot.com era eventually gave way to a Cambrian explosion of new software businesses,” said Canaccord Genuity analyst David Hynes. “MDB is already helping customers build AI-enabled applications”
“When you can get a pullback of this size on a generational asset, you take it,” he added.
