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What Happened in the Stock Market Today

By Jim Crumly – Jun 6, 2019 at 5:00PM

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Stocks climbed on hopes of an interest rate cut, and investors considered the outlooks for cloud software companies Cloudera and MongoDB.

Stocks rose Thursday as investors got more optimistic that the Federal Reserve may consider an interest rate cut in its meeting later this month. The Dow Jones Industrial Average (^DJI -0.38%) and the S&P 500 (^GSPC -1.03%) posted their third day of gains.

Today's stock market

Index Percentage Change Point Change
Dow 0.71% 181.09
S&P 500 0.61% 17.34

Data source: Yahoo! Finance.

As for individual stocks, two cloud software companies, Cloudera (CLDR) and MongoDB (MDB -9.71%), reported big numbers for revenue growth, but Cloudera's weak guidance came as a shock.

Rising graphs, stcks of coins, and columns of numbers.

Image source: Getty Images.

Cloudera falls to Earth

Cloud software platform specialist Cloudera reported mixed results for its first fiscal quarter, announced the departure of its CEO, and gave a stunningly low outlook for the rest of the year, causing the stock to plummet 40.8%.

Revenue increased 81% to $187.5 million, about $1 million below analysts' expectations, and most of the growth came from Cloudera's acquisition of Hortonworks. Annualized recurring revenue grew 21% year over year. Non-GAAP loss per share was $0.13, compared with the analyst consensus of a loss of $0.23.

Cloudera surprised investors by forecasting that growth of annualized recurring revenue will be flat to up 10% for the full year, meaning that top-line growth will come almost completely from the merger. The Hortonworks integration hasn't gone well, and the company said on the conference call that customers have been holding off on renewals, with some moving to the big public cloud vendors like Amazon and Microsoft.

The signs of strong competitive pressures, a management change, and yet another disappointing quarter had Cloudera shareholders heading for the exits today.

MongoDB beats growth expectations

Database platform vendor MongoDB beat expectations for fiscal first-quarter results but projected a loss greater than analysts were expecting, and shares fell 0.8%. Revenue grew 78% to $89.4 million, well ahead of the $83.1 million analysts were forecasting. Non-GAAP net loss was $0.22 per share, better than the consensus estimate of a loss of $0.24.

Like Cloudera, MongoDB made a significant acquisition last year when it bought cloud database vendor mLab last fiscal year, but unlike Cloudera, the integration appears to be going smoothly. MongoDB is migrating mLab customers to Atlas, its cloud-based service that allows customers to use the company's database on the big public clouds. Atlas is on fire, growing 340% in the quarter and now representing 35% of total revenue, compared 14% in the period a year ago.

MongoDB raised its guidance for full-year revenue above the analyst consensus, but said that full-year non-GAAP loss will be between $1.04 and $1.11 per share, worse than the $1.01 Wall Street was expecting. That may have accounted for the slight decline in the stock, which is still up 76% for the year.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors. Jim Crumly owns shares of AMZN and MongoDB. The Motley Fool owns shares of and recommends AMZN, MSFT, and MongoDB. The Motley Fool has a disclosure policy.

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