Why Is MongoDB (MDB) Stock Down 20% Today?

  • MongoDB (MDB) reported overall positive quarterly results yesterday.
  • However, the company also said it expects to report a worse-than-expected loss in the future.
  • MDB stock collapsed 20% as today’s traders weighed MongoDB’s results and guidance.
MDB stock - Why Is MongoDB (MDB) Stock Down 20% Today?

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If you glance at MongoDB’s (NASDAQ:MDB) second-quarter fiscal 2023 results, which were just released yesterday, you might expect MDB stock to be moving higher today. However, the complete opposite is happening. To find out why, you’ll need to look past the actual quarterly results and delve into MongoDB’s forward guidance.

Based in New York, MongoDB mainly provides database servers to help enterprise customers run their operations in the cloud. It’s actually a bigger company than you might expect, with a market capitalization of $17 billion.

Understandably, MongoDB put its best foot forward with quarterly highlights at the top of the press release. Those highlights include a 53% year-over-year (YOY) revenue increase to $303.7 million. Plus, MongoDB’s customer count grew to more than 37,000 as of July 31, 2022.

Granted, it wasn’t a perfect quarter for MongoDB. The company sustained a net earnings loss of $118.9 million, or $1.74 per share. However, probably not too many investors actually expected MongoDB to report a quarterly profit, so the net loss might not have been a major disappointment.

Why Is MDB Stock Falling?

Nevertheless, MDB stock collapsed today, falling 20% in early trading and testing the key $250 level. If the shares decline below the 52-week low of $213.39, buyer capitulation could be a distinct possibility.

So, what happened here? Was there buyer’s remorse because MongoDB isn’t a profitable company? Probably not. More likely, today’s traders are focused on MongoDB’s forward guidance.

For the third quarter of fiscal 2023, MongoDB anticipates that it will generate $300 million to $303 million in revenue. This would represent a decline compared to the just-reported $303.7 million for fiscal Q2.

In other words, MongoDB doesn’t expect to grow its revenue sequentially. That’s undoubtedly disappointing news to traders seeking continuous revenue expansion from this company.

Still, MongoDB President and CEO Dev Ittycheria accentuated the company’s quarterly progress in his commentary: “We are seeing robust growth in new workloads being deployed on our platform, which is indicative of the critical role we play in enabling customers to build and run mission critical applications that transform their business.”

Fair enough, and maybe MDB stock can recover from today’s selloff — which, admittedly, is deep and decisive.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.


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