Earnings

MongoDB share price: What to expect in Q2 earnings

MongoDB’s [MBD] share price has soared thanks to the company’s status as the must-have cloud database. In StackOverflow's 2020 annual developer survey, MongoDB was voted "Most Wanted Database by Developers" for the fourth year in a row, as well as gaining the title of Google Cloud’s Marketplace Technology Partner of the Year in 2019. 

Such accolades, combined with a coronavirus-triggered demand for all-things cloud, saw MongoDB’s share price gain, and the company delivered strong earnings in the first quarter. But will MongoDB’s share price benefit from similarly positive results in this week’s second-quarter earnings?

 

 

What’s happening with MongoDB's share price? 

MongoDB's share price is up 74.05% so far this year to 31 August’s close as investors back the cloud database company. Like most other listed companies on the planet, the stock saw a steep drop-off when the coronavirus hit, slumping to a year low of $93.81 on 16 March, but it did not falter for long. 

MongoDB’s share price has seen a staggering turnaround, rebounding 136.23% from its March low (as of 31 August’s close).

 

When are MongoDB reporting earnings?

2 September

 

How did MongoDB perform in Q1 earnings?

MongoDB’s share price has clearly been a beneficiary from the shift to cloud technology brought about by the coronavirus pandemic. Revenue in Q1 came in at $130.3m, a 46% increase from the previous year. Promisingly, MongoDB also managed to narrow losses, with non-GAAP net losses coming in at $7.3m, compared to the previous year's $12.1m. MongoDB's cloud-based Atlas service grew over 75%, making up 42% of overall revenue. 

"While the impact from COVID-19 will be longer than we originally expected at the beginning of this fiscal year, we are seeing clear signs that the current environment is reinforcing the long-term trends towards digital transformation and cloud migration," said Dev Ittycheria, President and CEO of MongoDB.

“While the impact from COVID-19 will be longer than we originally expected at the beginning of this fiscal year, we are seeing clear signs that the current environment is reinforcing the long-term trends towards digital transformation and cloud migration” - Dev Ittycheria, President and CEO of MongoDB

 

What is Wall Street expecting for Q2?

Wall Street expects MongoDB to post a loss of $0.39 a share in upcoming Q2 earnings, an increase from the $0.26 loss seen in the same quarter last year. Revenue is pegged to come in at $126.77m.

MongoDB itself is guiding for between $125m and $127m in revenue in the upcoming quarter. Non-GAAP losses are expected to come in at between $0.41 to $0.38 per share. For the full year, MongoDB is guiding for $520m to $530m in revenue, on non-GAAP losses of $1.34 to $1.21 per share.

$126.77m

MongoDB's expected Q2 revenue

  

So, is an earnings beat in store? MongoDB has beat analysts’ expectations in the last four consecutive quarters. Last quarter saw the company thrash Wall Street expectations, with losses coming in at $0.13 per share, compared to an expected $0.25. Another earnings beat could well be on the cards.

 

So, time to buy MongoDB?

Analysts tracking MongoDB's share price on Yahoo Finance have an average $238.50 price target on the stock, which would see a 2% upside on the current share price through 31 August’s close. Of the 7 analysts offering recommendations, 4 rate the stock a Hold, while the rest rate it a Strong Buy or a Buy.

Investors should also watch out for an update on the company’s international strategy in the results, which could well affect MongoDB’s share price. The company has just signed a deal with Alibaba [BABA] to provide the latest version of its database using the Chinese tech giant’s services. 

China is one of the biggest database software markets in the world and further expansion here could see MongoDB continue its phenomenal growth rate. If it goes well, MongoDB’s share price could continue to get Wall Street’s backing for a long time to come.

 

Market Cap$11.85bn
EPS (TTM)-3.46
Operating Margin (TTM)-34.37%
Quarterly Revenue Growth (YoY)45.8%

MongoDB share price vitals, Yahoo Finance, 1 September 2020

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