MongoDB (MDB 86.62, +2.89, +3.45%) reported another strong report on Tuesday afternoon.
The leading non-relational (or NoSQL) database company beat estimates and guided the following quarter revenue well above consensus for the fifth straight quarter. MongoDB is a growth story, so in-line EPS guidance is not a concern when combined with the huge upside in revenue.
Third quarter revenue grew 57% to $65 mln versus $59-60 mln guidance; subscription revenue grew 59% to $60 mln. Customer count grew 12% sequentially and 69% yr/yr to over 8,300.
MongoDB Atlas, the company's managed cloud database-as-a-service offering, grew revenue over 300% and now represents 22% of revenue, as customers "embraced the ease of use and flexibility of a fully managed modern cloud database service."
What's more, the company guided for revenue to accelerate to 63% in the fourth quarter after the company released several new developer-friendly products, including MongoDB Mobile and enhancements to the serverless platform, MongoDB Stitch.
MongoDB has established itself as the emerging database company that software developers love. That seems to naturally put the company in the cross-hairs of acquisitive, growth-hungry software giants that are flush with cash.
The stock initially spiked to a new all-time highs in response to the strong print on Tuesday afternoon, but this is not a good environment for high-flying momentum stocks with aggressive valuations.
With a ~$4.5 bln market capitalization, the stock trades with an enterprise value ~17x revenue or ~12x next year's revenue estimates, which assume sales growth slows to 41% from 58% this year. That is an aggressive valuation for a company that is not expected to turn a profit anytime soon.
MongoDB is a scarce asset in a very competitive database market. Meanwhile, we have seen multiple enterprise software deals this year at a mid-teens sales multiple.
- OUR VIEW
- LEARNING CENTER