MongoDB (MDB -1.12%), a provider of alternative database systems and related cloud computing services, has been a tremendous growth stock since its initial public offering in 2017. The stock has quadrupled in value, driven by a stellar 179% increase in trailing sales -- even though profits and cash flows of every description remain firmly negative.

As exciting as MongoDB's first two years on the public market have been, I'm convinced that the company's biggest wins still lie ahead.

A dollar bill folded, origami-style, into an arrow pointing upward.

Image source: Getty Images.

Compare and contrast

The database market is already huge, clocking in at $27 billion in annual sales in 2017 according to analyst firm William Blair. That's still just the beginning of a much larger story, as the market is expected to grow roughly 9% a year over the next half decade to land at $40.4 billion in 2022.

MongoDB ate a minuscule 0.4% of that $27 billion pie in 2017. Even now, with two more years of rampant revenue growth under its belt, the company is on track to grab just 1.2% of the total market in 2019.

Measuring MongoDB against industry giant Oracle (ORCL -1.73%) instead, you'll find that the relational database giant is the name to beat with approximately 25% of the database market's annual revenues under its thumb. Oracle is growing its database sales at a "mid-teens" rate per year, without breaking out that business in greater detail. Meanwhile, pure-play database specialist MongoDB's sales are skyrocketing to the tune of 52% year-over-year growth. MongoDB is clearly stealing market share from its larger rivals.

Oracle has earned its $181 billion market cap on the back of massive cash flows and dominant sales in several key markets -- including the database sector. MongoDB's $7.2 billion cap is microscopic by comparison, and that's also for good reasons. Skyrocketing sales plus negative earnings and cash flow typically equals a relatively small market cap, high volatility, and uncertain future prospects. Those are the breaks for fast-growing companies shoveling every penny of incoming cash into product development, marketing, and other growth-promoting operations.

The bottom line

That's MongoDB in a nutshell -- a small but fast-growing participant in an important software market with lots and lots of market share left to grab. I think it's more than reasonable to expect MongoDB's extreme growth phase to last for another five to 10 years before shifting into a more profit-conscious business model.

It's easy to see a $32 billion market cap based on more than $2 billion of annual sales in 2024. That would be a 340% gain in five years, which works out to average annual stock returns north of 80%. The best is absolutely still many years ahead for MongoDB.