By Senad Karaahmetovic
Bernstein analysts initiated research coverage on MongoDB (NASDAQ:MDB) with an Outperform rating and a $282 per share price target, suggesting a 30% upside potential relative to yesterday’s closing price.
The company is described as a "best-of-breed, new-generation, database vendor," which can sustain growth despite rising competition. The analysts argue that the market is underestimating MDB's growth potential.
"MDB is a technology leader, ahead of MSFT and AWS. The underlying market is large ($37B in 2025), fast-growing (24% CAGR 2021-25) and MDB is growing off a small base (~$1.3B current rev. run rate). So, MDB grows with the market, without requiring significant market share gain," the analysts told clients in an initiation note.
Despite some concerns about the company's profitability, Bernstein analysts believe such pessimism is already priced into expectations.
"Profitability concerns are baked in, multiple has reset (~75%) and the street is underestimating growth. Even considering the impact of a potential recession, we think MDB could beat consensus on top-line by 6-10%, supporting a valuation multiple at ~11x EV/Sales," the analysts concluded.
MongoDB shares trade 2% lower today.