Shares of MongoDB (MDB 1.41%) fell 20.9% in September 2019, according to data from S&P Global Market Intelligence. The database software developer's slide started with a merely solid earnings report that failed to excite investors.
MongoDB saw second-quarter sales rising 67% year over year, landing at $99.4 million. On the bottom line, net losses were reduced from $0.34 to $0.26 per diluted share. Your average Wall Street analyst would have settled for a net loss of $0.28 per share on revenues in the neighborhood of $91.7 million.
But the company's third-quarter earnings guidance was only in line with the analyst views at the time despite a slightly more optimistic revenue prognosis. For high-octane growth stocks like MongoDB, that's not always enough to preserve the stock's seat in Wall Street's nosebleed section. The stock plunged 17% over the next three days.
Several analysts followed up on MongoDB's results with rosy reports on their own, often raising their price targets on the stock to at least $180 per share. Barclays analyst Raimo Lenschow expected these results to trigger a short squeeze and drive the stock much higher at the drop of a hat.
That didn't happen. At this point, MongoDB's stock has nearly doubled over the past 52 weeks despite a 16% decline in the past three months. You can call it a discount if you like, though it's always hard to call MongoDB a value stock when both earnings and free cash flows are negative.
That's life in the fast lane -- MongoDB's $7.4 billion market cap is built on investor expectations of continued hypergrowth for the foreseeable future.