What happened
A deep analyst price target cut led to a steep decline in MongoDB‘s (MDB -7.39%) value on the last trading day of the week. The database specialist saw its share price erode by over 7%; even the under-pressure S&P 500 index did better, with a relatively benign 1.5% drop on the day.
So what
While this doesn’t mean that said analyst — Credit Suisse‘s Fred Lee — is now bearish on MongoDB, his is not an encouraging move either. Lee now pegs the stock as being worth $250 per share, quite some distance below his previous estimation of $305. He remains a MongoDB bull, though, as he maintained his outperform (read: Buy) recommendation on the tech company’s shares.
Lee’s adjustment is one of a series by analysts from a clutch of name researchers including Citigroup, Wedbush, and Mizuho (although, to be fair, not every one of them cut their price target). They follow MongoDB’s release of its fourth-quarter and full-year 2022 results. Although it handily beat the average prognosticator projection for both revenue and profitability, its top-line guidance fell short of estimates.
Investors are also likely concerned that MongoDB clients aren’t significantly increasing their usage. The company relies on a consumption-based sales model.
Now what
Most investors are far more concerned with a stock’s potential rather than its trailing performance. Already concerned with MongoDB’s sales dynamic, they still seem spooked by those weak revenue guidance figures. Hopefully for MongoDB investors, the company will find ways to encourage more user consumption.
Citigroup is an advertising partner of The Ascent, a Motley Fool company. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends MongoDB. The Motley Fool has a disclosure policy.
