Analyst Note| Julie Bhusal Sharma |
MongoDB reported strong second-quarter results that well exceeded management’s and our prior expectations, while also raising fiscal 2022 guidance. Revenue outperformance was driven by success in Atlas, MongoDB’s database as a service offering. On the back of a booming database market, MongoDB’s product superiority is increasingly demonstrated in the efficiency its platform affords developers, expanding use-case applicability, and the evolving mission-criticality of the applications moving to Atlas. Updating for the notable raise in 2022 guidance and what we foresee as an even more dramatic rise in the size of the global datasphere in the outer years of our explicit forecast, we are increasing our fair value estimate for the no-moat name to $288 per share from $226. With shares trading near $451, up 12% in the aftermarket, we view MongoDB as considerably overvalued--even as we bake in a stellar next 10 years as the rise in the size of the global datasphere directly creates an opportunity for MongoDB to store this incremental new data.