Last Update 04 Feb 26

Fair value Decreased 4.55%

MDB: AI Workloads And Cloud Recurring Revenue Will Support Future Leadership Transition

Our updated fair value estimate for MongoDB moves to $525 from $550, as analysts factor in expectations for higher long term revenue growth, a richer future P/E multiple, and a lower discount rate, partially offset by more conservative profit margin assumptions.

Analyst Commentary

Recent Street research has generally tilted positive on MongoDB, with a series of higher price targets and reaffirmed positive ratings. Bullish analysts are pointing to execution in the core business, perceived strength in the cloud offering, and a valuation that they view as attractive relative to peers.

Several firms have adjusted their outlooks as part of broader software sector reviews, and MongoDB often features as a higher conviction name within those frameworks. The commentary frequently cites stable macro and IT spending conditions, as well as investor sentiment that has been cautious toward software, as context for these moves.

Investors reading these reports are seeing a consistent message that focuses on the company’s positioning in databases, potential for artificial intelligence related workloads, and the scale of its recurring cloud revenue base as key parts of the long term story.

Bullish Takeaways

Multiple bullish analysts have lifted price targets into the US$440 to US$500 range. They link these targets to higher assessed profitability and confidence in MongoDB’s ability to execute on its growth plans.
Some research highlights MongoDB as a top pick within software, with one firm placing it on a Conviction List. The research points to what it views as technological leadership and strong customer stickiness at the database layer as supports for durable growth assumptions.
Reports citing reaccelerating Atlas growth and expectations for more than US$2b of Atlas annual recurring revenue by the end of fiscal 2026, with line of sight to over US$2.5b in fiscal 2027, present MongoDB’s cloud business as a central driver of long term valuation.
Several bullish analysts argue that the shares trade at a discount to software peers. Macro and IT spending are described as stable and the sector is characterized as out of favor, which they see as a setup where improved sentiment or continued execution could be supportive for the stock’s valuation over time.

What's in the News

MongoDB announced an expansion of its AI capabilities at MongoDB.local San Francisco, integrating Voyage AI embedding and reranking models directly into its core database platform to create a unified data intelligence layer for production AI workloads, aimed at reducing the need to move or duplicate data.
The company introduced a suite of new AI features for developers, including five Voyage AI embedding models, Automated Embedding for MongoDB Community Vector Search, embedding and reranking AI model APIs in Atlas, and an AI powered data operations assistant for MongoDB Compass and Atlas Data Explorer.
Voyage AI models, including the Voyage 4 embedding series and the voyage multimodal 3.5 model, are being made available through MongoDB Atlas via API and integrated with MongoDB Community, designed to support multimodal data such as text, images, and video while keeping embeddings current as data changes.
MongoDB reported that it is trusted by more than 60,000 customers running mission critical workloads and introduced a new AI skills certification intended to help teams scale AI related workloads on its platform.
Management issued earnings guidance for the fourth quarter of fiscal 2026 with expected revenue of US$665m to US$670m, and for the full fiscal year 2026 with expected revenue of US$2.434b to US$2.439b, which the company stated represents 21% to 22% year over year revenue growth relative to its prior period. (Corporate guidance)

Valuation Changes

Fair Value Estimate reduced modestly to US$525 from US$550.
Discount Rate edged slightly lower to 8.77% from 8.94%, reflecting a small change in the model’s required return.
Revenue Growth nudged higher to 21.76% from 21.39% in the long-term assumptions.
Net Profit Margin moved lower to 10.35% from 13.67%, indicating more conservative profitability assumptions.
Future P/E raised to 128x from 103x, implying a richer multiple applied to projected earnings in the model.

Strong customer and workload growth, integrated AI capabilities, and modernization efforts position MongoDB for outsized gains in revenue, margin expansion, and legacy market displacement.
Expansion across industries, geographies, and developer segments drives long-term high growth, diversified revenues, reduced cyclicality, and durable earnings improvement.
Heightened regulatory, competitive, and technological pressures risk raising costs, eroding pricing power, and constraining MongoDB's ability to grow profitably and expand its market share.

Catalysts

About MongoDB

Provides general purpose database platform worldwide.What are the underlying business or industry changes driving this perspective?

Analyst consensus expects strong new workload acquisition and Atlas growth, but this likely underestimates the potential for sustained re-acceleration, as MongoDB just posted six-year highs in net new customers and has demonstrated a robust bump in self-serve channel adoption, suggesting customer and workload growth could compound faster than forecast, driving revenue growth above current expectations.
While analysts broadly anticipate AI-driven incremental opportunities, they may be materially underestimating the pace at which MongoDB's deep integration of real-time data, native vector search, embeddings (accelerated by Voyage AI), and unified developer tooling positions it to capture outsized share of the emerging AI-powered application market, translating into both higher revenue and superior long-term gross margin expansion as AI scales.
MongoDB's architecture, built from the ground up for cloud-native, multi-cloud, and hybrid environments, is likely to see accelerating enterprise displacement of legacy relational systems as digital transformation efforts and workloads intensify, supporting a secular uplift in both average contract value and retention rates that flows directly to higher recurring revenue and margin durability.
Recent momentum and strategic hires in application modernization-especially the investments in automation and tooling-could unleash a large-scale wave of legacy database migrations starting in fiscal '27, increasing MongoDB's addressable market and creating a multi-year uplift in platform revenues and upsell activity.
The rapid internationalization and expansion into underpenetrated verticals (such as financial services, healthcare, and telecom), combined with developer-first go-to-market wins, set the stage for a prolonged period of high growth and increasing diversification of the revenue base, which should reduce cyclicality and incrementally boost long-term operating margins and earnings.

MongoDB Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

This narrative explores a more optimistic perspective on MongoDB compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
The bullish analysts are assuming MongoDB's revenue will grow by 19.8% annually over the next 3 years.
The bullish analysts assume that profit margins will increase from -3.5% today to 3.5% in 3 years time.
The bullish analysts expect earnings to reach $134.8 million (and earnings per share of $1.41) by about September 2028, up from $-78.6 million today. The analysts are largely in agreement about this estimate.
In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 373.4x on those 2028 earnings, up from -342.6x today. This future PE is greater than the current PE for the US IT industry at 29.0x.
Analysts expect the number of shares outstanding to grow by 7.0% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.79%, as per the Simply Wall St company report.

MongoDB Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

The global trend toward data localization and stricter data sovereignty requirements could force MongoDB to increase investments in compliance and regional infrastructure, which may inflate operating expenses and limit its ability to grow revenue efficiently in international markets.
Intensifying competition from open-source database options and the rapid adoption of alternatives like Postgres, especially as hyperscale cloud providers and major data platforms increase their Postgres offerings, could commoditize database technologies and erode MongoDB's pricing power, leading to downwards pressure on revenue growth and average deal size.
The movement of large enterprises toward "cloud repatriation"-shifting workloads from public cloud to on-premises infrastructure for cost control-may limit the expansion potential of MongoDB Atlas, which now represents the majority of MongoDB's revenue, ultimately reducing annual recurring revenue growth opportunities over the long run.
Sustained high levels of spending on R&D and sales and marketing to defend market share and win enterprise customers in a crowded, fast-evolving database sector risk compressing MongoDB's operating margins and could restrict future improvement in net margins.
Increased competition from cloud-native multi-model databases and proprietary offerings from hyperscalers (such as AWS, Google Cloud, and Microsoft Azure), as well as advances in AI-driven database automation, could marginalize MongoDB's relevance and limit its market share expansion, directly impacting long-term revenue and earnings growth prospects.

Valuation

How have all the factors above been brought together to estimate a fair value?

The assumed bullish price target for MongoDB is $394.78, which represents two standard deviations above the consensus price target of $317.1. This valuation is based on what can be assumed as the expectations of MongoDB's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $425.0, and the most bearish reporting a price target of just $222.0.
In order for you to agree with the bullish analysts, you'd need to believe that by 2028, revenues will be $3.8 billion, earnings will come to $134.8 million, and it would be trading on a PE ratio of 373.4x, assuming you use a discount rate of 8.8%.
Given the current share price of $331.09, the bullish analyst price target of $394.78 is 16.1% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystHighTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystHighTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystHighTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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