2023-03-09 07:55:11 ET
MongoDB ( NASDAQ: MDB ) shares fell more than 10% in premarket trading on Thursday as the developer platform company reported fourth-quarter results and guidance that left several on Wall Street worried about slowing growth.
Barclays analyst Raimo Lenschow, who has an overweight rating on MongoDB ( MDB ), noted the guidance "only" implies 16% growth and a "meaningful" slowdown in the company's Atlas and Enterprise Advanced segments.
"Management has a tendency of being ultra-conservative with guidance ... and the picture now seems more de-risked," Lenschow wrote in an investor note. "However, we can see that investors will likely want to see evidence that consumption trends are improving and unused credit not becoming the new norm."
Lenschow, who lowered his per-share price target to $257 from $264 following the results, added that MongoDB ( MDB ) is "clearly making changes" in light of the changing global economy, which should help boost profitability, but "ultimately, the [MongoDB] story is still centered around growth."
Looking ahead, MongoDB ( MDB ) expects first-quarter sales to be between $344M and $348M, with adjusted earnings between 17 and 20 cents per share.
William Blair analyst Jason Ader, who also has an outperform rating on MongoDB ( MDB ), noted that Atlas consumption took a larger-than-expected hit in December and January, even when accounting for the holidays. As such, Atlas revenue is expected to be flat to down in the first-quarter, even when taking into account some "modest improvements" in February.
"Despite some potential volatility around consumption revenue in a tougher macro environment, we see a multiyear runway for growth as MongoDB establishes itself as the premier independent database for modern apps," Ader explained.
Citi analyst Tyler Radke also was concerned by weaker-than-expected consumption, adding there are "mixed signals" coming from the company as the company had near record direct sales and continues to focus on improving profitability.
"There’s definitely some mixed signals post results, but we find ourselves liking the set-up as we see the numbers now being de-risked," Radke wrote in an investor note.
Prior to reporting fourth-quarter results, investment firm Monness, Crespi, Hardt said MongoDB ( MDB ) had a "low bar" to surpass .
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MongoDB sinks as Wall Street says slowing growth likely to 'increase nervousness'