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On Friday, Prosecutor Davidson changed his stance on: Mongo DB (NASDAQ: NASDAQ:), moved the stock's rating from “neutral” to “buy” and raised its price target to $430 from the previous $405.
The revisions followed the company's after-hours guidance release, which indicated that year-over-year growth for fiscal 2025 is expected to be 13-15%, compared to the consensus estimate of 22%. . Additionally, operating margin (OM) is expected to be around 10% versus consensus of 14%.
DA Davidson analysts say MongoDB revenue faces $80 million challenge in FY25 due to non-recurring aspects of multi-year term licenses and unused Atlas (NYSE:) commitments accounting for $40 million each I emphasized what to expect.
This situation is expected to impact growth by approximately 5 percentage points. Operating margins are expected to retreat from his 16% in FY24 due to high gross margins and employment growth that will not be repeated.
Despite these headwinds, Attorney Davidson remains optimistic about MongoDB's future performance. Analyst commentary suggests that conservative guidance, particularly on the Atlas platform slowdown, presents a strong opportunity for upside. The company believes the market's expected level of deceleration for Atlas is overly cautious and, as a result, MongoDB stock has promising growth potential.
The upgrade comes after MongoDB's stock price fell 9% in after-hours trading on the day of the announcement. The company's forward-looking statements are prudent in fiscal 2025, reflecting the impact of certain high-margin revenues that are not expected to recur and an aggressive hiring strategy.
Despite these challenges, DA Davidson believes current guidance underestimates MongoDB's capabilities and suggests it has the potential to exceed the modest expectations set for the Atlas platform. I am.
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