MongoDB ( NASDAQ: MDB ) shares surged nearly 27% in premarket trading after the database program provider reported strong third-quarter results and guidance, with investment firm Baird noting the better results from its Enterprise Advanced unit and Atlas product should create a "short squeeze."
Analyst Raimo Lenschow, who has an overweight rating on MongoDB ( MDB ) and a $240 price target, noted that MongoDB's ( MDB ) third-quarter results are likely to disprove most of the bearish themes surrounding the company and result in a "meaningful short squeeze."
"Arguably, not all is perfect as the quarter benefited from multi-year EA (Enterprise Advanced) contribution," Lenschow wrote in a note to clients. "Nonetheless, overall better Atlas consumption trends, healthy customer adds and much better profitability should drive investors back into the name as its status as a premium growth asset got confirmed."
For the third-quarter, MongoDB ( MDB ) said it earned an adjusted 23 cents per share as revenue jumped 47% year-over-year to $333.62M. Analysts were looking for an adjusted loss of 17 cents per share on $304.73M in revenue.
During the period, Atlas revenue rose 61% year-over-year, while Enterprise Advanced accounted for $93M in sales, due in part to a higher number of multi-year deals signed during the quarter.
The company added that it had more than 39,100 customers for the period ending October 31.
Looking ahead, MongoDB ( MDB ) expects fourth-quarter revenue to be between $334M and $337M and fiscal 2023 revenue to be between $1.257B and $1.26B.
Analysts were looking for $314.84M and $1.21B, respectively.
Lenschow added that the fourth-quarter and full-year operating profit guidance also beat consensus, as the company is reigning in the growth of its expenses as a result of the global economic headwinds.
Late last month, KeyBanc Capital Markets started MongoDB ( MDB ) with an overweight rating, highlighting several positive factors for the cloud-database provider .
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MongoDB surges as Baird says Q3 earnings, guidance 'should create short squeeze'