Mongo DB (MDB – (Free Report) recently appeared on the list of most searched stocks on Zacks.com. Therefore, you may need to consider some important factors that may influence the stock's performance in the near future.
Over the past month, the database platform's stock has increased by -21.3%. This compares to a +3.1% change in the Zacks S&P 500 Composite Index. During this period, the Zacks Internet – Software industry, which includes MongoDB, rose 1.9%. The key question here is: What is the future direction of the stock price?
While media releases and rumors about significant changes in a company's business prospects typically cause its stock to “trend” and lead to immediate price movements, there are some fundamentals that ultimately govern buy-and-hold decisions. There are always facts.
Regarding revisions to performance forecasts
Zacks prioritizes evaluating changes in a company's future earnings expectations above all else. That's because we believe that the present value of future income streams determines the fair value of a stock.
Our analysis is fundamentally based on how the sell-side analysts covering a given stock are revising their earnings estimates to account for the latest business trends. As a company's earnings expectations rise, so does the fair value of its stock. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, which causes the stock price to rise. For this reason, empirical research has shown that there is a strong correlation between trends in earnings forecast revisions and short-term stock price movements.
MongoDB is expected to post earnings of $0.38 per share for the current quarter, representing a year-over-year change of -32.1%. Over the past 30 days, the Zacks Consensus Estimate has changed -54.1%.
The consensus earnings estimate for the current fiscal year of $2.41 represents a year-over-year change of -27.6%. This estimate has changed -41% over the past 30 days.
Next year's consensus revenue estimate of $3.28 represents a +36.2% change from the revenue that MongoDB would have reported a year ago. Over the past month, the estimate has changed by -18.2%.
The Zacks Rank, our proprietary, outside-audited stock evaluation tool, harnesses the power of earnings estimate revisions to be a more conclusive indicator of a stock's short-term price performance. . The magnitude of the recent change in consensus estimates, as well as three other factors related to earnings estimates, have given MongoDB a Zacks Rank of #3 (Hold).
The chart below shows the company's consensus EPS estimate over the next 12 months over time.
12 months EPS
Expected revenue growth rate
Earnings growth is arguably the best indicator of a company's financial health, but nothing will happen if a company can't grow its revenue. After all, it's nearly impossible for a company to increase profits over a long period of time without increasing revenue. Therefore, it's important to know a company's earnings growth potential.
For MongoDB, the consensus revenue estimate for the current quarter is $438.44 Million, representing a year-over-year change of +19.1%. For the current and next fiscal years, estimates of $1.92 billion and $2.36 billion represent changes of +14.2% and +22.8%, respectively.
Last reported results and surprising details
MongoDB reported revenue of $458 million in its last reported quarter. This corresponds to a year-over-year change of +26.8%. EPS for the same period was $0.86, compared to $0.57 a year ago.
The reported earnings represent a surprise of +6.02% when compared to the Zacks Consensus Estimate of $431.99 million. EPS surprise was +86.96%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company has surpassed consensus revenue estimates every time during this period.
evaluation
You cannot make efficient investment decisions without considering stock valuation. Whether a stock's current price accurately reflects the intrinsic value of the underlying business and the company's growth prospects is a key determinant of future stock performance.
The present value of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), and the past value of your company Comparing a company to its peers based on these parameters can help you see if it is overvalued, overvalued or undervalued, but how reasonable its stock is You can get a good idea of what
Zacks Value Style Score (part of the Zacks Style Scores system). We pay close attention to both traditional and non-traditional metrics and rate stocks from A to F (A is better than B, B is better than C, and A is better than B. is also very useful in identifying whether a stock is overvalued, well-valued, or temporarily undervalued.
MongoDB is rated F on this score, indicating that it trades at a premium relative to its peers. Click here to see the values of some of the metrics that determined this grade.
conclusion
The facts discussed here, and many others on Zacks.com, may help you decide whether the market buzz surrounding MongoDB is worth paying attention to. However, the company's Zacks Rank #3 suggests it could outperform the broader market in the near term.
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