Today we're going to take a look at the well-established MongoDB, Inc. (NASDAQ:MDB). The company's stock received a lot of attention from a substantial price movement on the NASDAQGM over the last few months, increasing to US$501 at one point, and dropping to the lows of US$327. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether MongoDB's current trading price of US$359 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at MongoDB’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
See our latest analysis for MongoDB
What's The Opportunity In MongoDB?
According to our valuation model, MongoDB seems to be fairly priced at around 6.7% below our intrinsic value, which means if you buy MongoDB today, you’d be paying a reasonable price for it. And if you believe the company’s true value is $384.98, then there isn’t much room for the share price grow beyond what it’s currently trading. Is there another opportunity to buy low in the future? Since MongoDB’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
What does the future of MongoDB look like?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. However, with an extremely negative double-digit change in profit expected over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for MongoDB, at least in the near future.
What This Means For You
Are you a shareholder? MDB seems fairly priced right now, but given the uncertainty from negative returns in the future, this could be the right time to reduce the risk in your portfolio. Is your current exposure to the stock optimal for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping an eye on MDB for a while, now may not be the most advantageous time to buy, given it is trading around its fair value. The price seems to be trading at fair value, which means there’s less benefit from mispricing. Furthermore, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help gel your views on MDB should the price fluctuate below its true value.
If you'd like to know more about MongoDB as a business, it's important to be aware of any risks it's facing. You'd be interested to know, that we found 2 warning signs for MongoDB and you'll want to know about them.
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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.
About NasdaqGM:MDB
Flawless balance sheet with reasonable growth potential.
