Please ensure Javascript is enabled for purposes of website accessibility

Why MongoDB Shares Jumped as Much as 10.5% This Morning, Just for a While

By Anders Bylund - Dec 10, 2019 at 2:16PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The alternative database expert beat analyst targets in the third quarter, but not by as wide a margin as some expected -- the surprise just wasn't big enough to impress the market.

What happened

Shares of MongoDB (MDB 7.29%), a specialist in nontraditional database software, rose as much as 10.5% on Tuesday morning, following the release of strong third-quarter results. The gains didn't last long, though. By 12:50 p.m. EST, the stock had lost the entire gain, and was trading at Monday's closing price again.

So what

In the third quarter of fiscal year 2020, MongoDB's sales rose 68% year over year to $109.4 million. On the bottom line, adjusted net losses shrank from $0.30 to $0.26 per share. The analyst consensus pointed to a net loss of $0.28 per share on revenues near $99.8 million. Management also issued full-year guidance above the current analyst view.

A young office worker, elbows on his desk and palms pressed to his temples, stares at his laptop screen in wide-eyed surprise.

Image source: Getty Images.

Now what

As usual, MongoDB's fantastic revenue growth was driven by the rapid adoption of MongoDB Atlas, a cloud-based database solution in a subscription-based software-as-a-service model. Atlas sales rose 185% year over year, accounting for 40% of the company's total revenue in the third quarter.

These results provided ample support for the morning's sharp spike, but the market enthusiasm faded as analyst reports started to roll in. Bulls and bears alike reduced their target prices on the stock, citing lofty valuation ratios and a smaller revenue surprise than usual. Don't cry for MongoDB's investors, though -- the stock can still boast a 55% gain over the last 52 weeks.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

MongoDB Stock Quote
MongoDB
MDB
$250.06 (7.29%) $17.00

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

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
356%
 
S&P 500 Returns
124%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/29/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.