Shares of database developer MongoDB are up 28% after the report. Worth buying

Shares of database software developer MongoDB jumped more than a quarter on Tuesday, December 2, following the release of its third-quarter earnings. The company significantly beat Wall Street's revenue and profit expectations and raised its full-year sales forecast thanks to the growing popularity of its Atlas cloud database platform.

Shares of database software provider MongoDB were worth $419.5 at their peak during trading on Dec. 2 - a 27.5% increase from the close of trading a day earlier. It's also the highest value since March 2024.

The stock rose after the company reported adjusted earnings of $1.32 per share on revenue of $628.3 million for the third quarter of fiscal 2026, which ended Oct. 31. Analysts polled by LSEG had expected adjusted earnings of $0.8 per share and $592 million in revenue, CNBC wrote. Revenue was up 19% from the same period last year.

Revenue from Atlas, a cloud-based platform that delivers databases for AI, grew 30% year-over-year and accounted for 75% of MongoDB's total sales for the quarter. By the end of the quarter, the number of Atlas customers exceeded 60,800. The company forecasts that revenue from the platform will grow another 27% in the current quarter.

MongoDB raised its full-year revenue guidance: it expects to generate between $2.434 billion and $2.439 billion. The previous guidance called for revenue between $2.34 billion and $2.36 billion.

Trends in artificial intelligence, cloud and data have reached a "real tipping point," MongoDB CEO Chiranthan Desai said in a conference call. He promised investors to focus on customer experience and innovation in the coming months, CNBC writes.

MongoDB is having a strong year. In the first two quarters of 2025, the company also reported revenues above market expectations. Until the second quarter report, however, investors were distrustful of the company. At the end of 2024, investors were alarmed by the slowdown in growth of the MongoDB Atlas cloud platform and the unexpected departure of two top managers - chief operating officer and chief financial officer, noted stock trader Timothy Sykes. He wrote that despite raising its full-year guidance, Atlas' customer churn and staffing instability could affect the stock's short-term trajectory.

The fear that MongoDB might lose out in the race for customers was reinforced by news from competitors: earlier this year Snowflake announced plans to buy Crunchy Data, a startup that helps customers work with rival PostgreSQL service, and another player in that market, Databricks, acquired similar startup Neon for about $1 billion.

During the second quarter earnings conference call with analysts, MongoDB management allayed investor fears by showing examples of customers choosing its solutions over PostgreSQL. Among them was a "leading electric car manufacturer" that uses MongoDB for its autonomous driving platform. What that company is, management did not specify.

Analysts at Bernstein raised their target price for the stock to $452 on Dec. 2, up 37.5% from Monday's closing price. The investment bank expects the securities to continue to rise due to accelerating business amid challenges from other players. "We expect strong consumer demand, possible momentum from AI, and positive effects from the Fed's rate cut, which should support near-term stock valuation gains," Bernstein said in a note quoted by CNBC.

According to MarketScreener, several other analysts raised their target price on MongoDB shares on Tuesday, including Wedbush and UBS (both to $440), and Truist, Oppenheimer and RBC (all three to $450).

In total, according to MarketWatch, 43 analysts have rated MongoDB securities and most recommend "buy" them (24 Buy and seven Overweight). Another nine advise "hold" the securities (Hold)), one - "sell" (Underweight). The average target price is $393.69, up 19.7% from the close of trading on Dec. 1, but below the current value of the securities after they surged by a quarter.

This article was AI-translated and verified by a human editor