Breakeven On The Horizon For MongoDB, Inc. (NASDAQ:MDB)

We feel now is a pretty good time to analyse MongoDB, Inc.'s (NASDAQ:MDB) business as it appears the company may be on the cusp of a considerable accomplishment. MongoDB, Inc., together with its subsidiaries, provides general purpose database platform worldwide. On 31 January 2024, the US$26b market-cap company posted a loss of US$177m for its most recent financial year. Many investors are wondering about the rate at which MongoDB will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for MongoDB

According to the 30 industry analysts covering MongoDB, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2026, before generating positive profits of US$66m in 2027. Therefore, the company is expected to breakeven roughly 3 years from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 27%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving MongoDB's growth isn’t the focus of this broad overview, however, bear in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we would like to bring into light with MongoDB is its debt-to-equity ratio of 107%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

There are too many aspects of MongoDB to cover in one brief article, but the key fundamentals for the company can all be found in one place – MongoDB's company page on Simply Wall St. We've also compiled a list of essential aspects you should further examine:

1. Valuation: What is MongoDB worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether MongoDB is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on MongoDB’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.