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What Happened in the Stock Market Today

By Jim Crumly - Dec 10, 2019 at 4:57PM

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Client growth and smaller losses boosted Stitch Fix, and revenue is soaring at MongoDB.

Stocks drifted sideways for most of the session Tuesday as investors pondered political and trade news out of Washington. The Dow Jones Industrial Average (^DJI 1.76%) and the S&P 500 (^GSPC 2.47%) both turned lower in the last hour of trading. Biotech stocks had a strong day, but most market sectors fell.

Today's stock market

Index Percentage Change Point Change
Dow (0.10%) (27.88)
S&P 500 (0.11%) (3.44)

Data source: Yahoo! Finance.

As for individual stocks, two fast-growing but unprofitable companies reported quarterly results that beat expectations. Shares of Stitch Fix (SFIX 3.62%) rose on the news but those of MongoDB (MDB 7.29%) lost ground.

Wall Street sign outside of the New York Stock Exchange

Image source: Getty Images.

Stitch Fix sews up an impressive quarter

Shares of Stitch Fix rose 4.8% after the company reported strong revenue and client growth with improving profitability in its fiscal first quarter. Revenue increased 21.5% to $444.8 million, above the high end of disappointing guidance the company had provided three months ago. Stitch Fix posted a net loss of $0.2 million, or less than $0.01 per share, which was better than the $0.06-per-share loss analysts were expecting.

The online personalized styling service added 180,000 new active clients in Q1 for a total of 3.42 million, an increase of 16.6% over the total in the period a year ago and an improvement on the 103,000 clients it gained last quarter. Gross margin expanded to 45.3% compared with 45.1% last year and 44.1% last quarter. Net revenue per client grew 9.5% to $485.

Stitch Fix is rolling out a direct-buy program, which allows customers to buy outside their "fix," selecting from a list of products curated to match their tastes. The company said the program has been well received by clients and cited that success as a reason for increasing full-year profit guidance.

MongoDB grows revenue and losses at a rapid pace

Database software provider MongoDB grew revenue faster than expected in the third quarter and issued strong guidance. Shares of the technology company opened 10.5% higher on the news, but then drifted down during the day to close 1.4% lower.

Revenue increased 52% to $109.4 million, well above the range of $98 million to $100 million the company had forecast last quarter. MongoDB lost a hefty $42.4 million in Q3, but the non-GAAP loss per share of $0.26 was $0.02 less than analysts were expecting. The company expects revenue between $109 million and $111 million in Q4, while the analyst consensus opinion has been for only $100 million.

MongoDB's explosive top-line growth is coming from Atlas, its cloud-based software-as-a-service offering. Atlas revenue grew 185% in the quarter and now accounts for 40% of the company total. MongoDB made clear that profitability is nowhere in sight -- non-GAAP losses are expected to grow sequentially next quarter -- but investors seem to accept that fact in light of the disruptive company's rapidly growing scale.

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Stocks Mentioned

MongoDB Stock Quote
$250.06 (7.29%) $17.00
StitchFix Stock Quote
$8.59 (3.62%) $0.30
Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
$33,212.96 (1.76%) $575.77
S&P 500 Index - Price Return (USD) Stock Quote
S&P 500 Index - Price Return (USD)
$4,158.24 (2.47%) $100.40

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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