Key Takeaways
- MongoDB shares plunged more than 20% ahead of Friday’s opening bell after the document-oriented database provider issued guidance that came in well below Wall Street expectations.
- CEO Dev Ittycheria said the company had a slower-than-expected start to the year for both Atlas consumption growth and new workload wins, which will have a downstream impact for the remainder of fiscal 2025.
- Monitor if buyers can defend the $238 level in MongoDB shares, an area on the chart that finds support from a horizontal line that links key price points over the past 20 months.
MongoDB (MDB) shares plunged more than 20% in premarket trading Friday as soft guidance offset stronger-than-expected quarterly results.
The company, which makes money by selling add-on features and support for its open-source document-oriented database, guided fiscal second-quarter adjusted earnings of between 46 cents and 49 cents per share, well below analysts’ forecasts of 58 cents a share. It projects net sales in the period of $460.0 million to $464.0 million, also below the $470.4 million Street estimate.
MongoDB now expects full-year adjusted earnings per share of between $2.15 and $2.30, compared with previous guidance of $2.27 to $2.49. The company pegs revenue at between $1.88 billion and $1.90 billion, versus a previous forecast of between $1.90 billion and $1.93 billion.
“We had a slower than expected start to the year for both Atlas consumption growth and new workload wins, which will have a downstream impact for the remainder of fiscal 2025,” MongoDB president and CEO Dev Ittycheria said in the company’s earnings statement.
The weak outlook follows light guidance from other enterprise software companies, including Salesforce (CRM), UiPath (PATH), and Workday (WDAY), as corporate customers spend more cautiously amid an uncertain economic environment.
For the first fiscal quarter ending April 30, the company reported adjusted earnings of 51 cents per share on revenue of $450.6 million. Analysts had expected earnings of 40 cents a share on sales of $439.7 million. While the top line grew 22% from the prior year’s equivalent quarter, it marked the third consecutive quarter where sales growth had slowed.
Monitor if Buyers Can Defend This Key Chart Level
MongoDB shares have continued to move lower since a bull trap pattern appeared on the chart in mid-February. More recently, the 50-day moving average (MA) has crossed below the 200-day MA to form a bearish death cross, with the price breaking down below the lower trendline of a multi-month trading range on Wednesday accompanied by the highest share turnover in a single day since early March.
In upcoming trading sessions, investors should monitor if buyers can defend the $238 level, an area on the chart that finds support from a horizontal line that links key price points over the past 20 months.
MongoDB shares were down 24% at $235.50 about two hours before the opening bell.
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