What do you do when Atlas shrugs?
MongoDB felt the earth move under its feet big time on March 6 when the database software maker beat Wall Street’s fiscal-fourth-quarter earnings expectations but issued a weaker-than-expected outlook for fiscal 2026.
“In fiscal ’26, we expect our customers will continue on their AI journey from experimenting with new technology stacks to building prototypes to deploying apps in production,” President and CEO Dev Ittycheria told analysts during the company’s earnings call.
“We expect the progress to remain gradual as most enterprise customers are still developing in-house skills to leverage AI effectively,” he said. “Consequently, we expect the benefits of AI to be only modestly incremental to revenue growth in fiscal ’26.”
Ittycheria said that Atlas, the company’s cloud database service, will continue to see robust growth as it approaches a $2 billion run rate this year, but “we expect our non-Atlas business will represent a meaningful headwind to our growth in fiscal ’26.”
“We expect our non-Atlas business will represent a meaningful headwind to our growth in fiscal ’26 because we expect fewer multiyear deals and because we see that historically non-Atlas customers are deploying more of the incremental workloads on Atlas,” he said.
Several investment firms issued research reports after the New York company posted earnings.
MongoDB’s stock price tumbled after releasing quarterly results.
Analyst cites severe MongoDB selloff
Wedbush slashed its price target on MongoDB (MDB) to $300 from $360 and affirmed an outperform rating on the shares.
The ivnestment firm said MongoDB faces multiple headwinds across both Atlas, which is expecting to see a moderate impact from AI, and non-Atlas revenue segments while looking to capitalize on its growth initiatives to maximize the current and long-term opportunities.
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Guggenheim lowered its price target on MongoDB to $300 from $325 and maintained a buy rating on the shares.
The investment firm told investors that it saw “a significant disconnect” between the quality of MongoDB’s business — evidenced by its “robust” Q4 Atlas exit rate, healthy new logo adds, and growth investments — and the stock’s valuation.
The “severe” selloff — MongoDB shares dropped 27% on March 6 — was made worse by MongoDB maintaining its “historically conservative guidance approach vs. peers guiding more aggressively,” Guggenheim added.
The firm adjusted its target to account for lowered revenue forecasts but said that in its fiscal 2026 “plausible case” it is modeling Atlas growth of 27% coupled with non-Atlas growth of 5% for total revenue growth of 20%, or seven points above the company’s initial guidance.
Is MongoDB a ‘buy the dip’ stock?
Stephen Guilfoyle noted that nearly all analysts who wrote about MongoDB revised their target prices lower, “many by magnitudes of hard-to-believe size and scope.”
The veteran trader said in his recent TheStreet Pro column that “MongoDB is a good company with a tremendous balance sheet.”
“This, however, is not, in my opinion, the time to try to catch a falling knife,” he said. “The stock will likely be volatile and therefore tradable.”
Guilfoyle, whose career dates back to the floor of the New York Stock Exchange in the 1980s, said MongoDB was trading below established support created last summer and autumn.
“If that level, which is about $213, cannot be retaken and held, then MDB is not a ‘buy-the-dip’ candidate,” he said.
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