MDB - MongoDB: Growth And Margins Expected To Compress In FY25

2024-03-24 10:23:19 ET

Summary

• MongoDB's stock has declined while its peers have seen gains, with disappointing Q4 results and a weak outlook for this year.
• Risks include deceleration in growth rates, weaker usage trends, and slower customer additions.
• The company is guiding to just 13-15% y/y growth in FY25 (despite exiting Q4 of FY24 at a 27% growth rate), citing tougher comps in the prior year.
• It's also pointing to operating margin compression, driven in part by adding sales capacity.
• Despite these risks, MongoDB stock trades at a rich ~13x revenue multiple.

It's difficult to remember this maxim in a frothy market environment, but investors should always keep in the back of their heads that valuation matters . Amid all-time market highs, a rising tide will not lift all boats: especially expensive stocks that are starting to see their strong fundamental performance unwind....

For further details see: