MongoDB Stock Plunges 54% in a Year: Here's Why You Should Stay Away

Core Viewpoint - MongoDB's stock has significantly underperformed in the past year, dropping 54.1%, amidst a challenging macroeconomic environment and increasing competition [1][2]. Competitive Landscape - MongoDB faces strong competition from Amazon's DynamoDB, Couchbase, and Oracle, which are enhancing their performance and features [3][4]. - Oracle's shares have increased by 10.1% over the past year, while Amazon and Couchbase have seen declines of 2.7% and 40%, respectively [3]. Financial Performance and Margins - MongoDB's operating margin is projected to decrease from 15% in fiscal 2025 to 10% in fiscal 2026, primarily due to the absence of high-margin license revenues and increased R&D and marketing expenses [5]. - The company's gross margin has declined from 77% to 75%, with its lower-margin cloud product, Atlas, now representing 71% of revenues [6]. Revenue Guidance - For fiscal 2026, MongoDB anticipates revenues between $2.24 billion and $2.28 billion, indicating a modest growth of 12.4% year-over-year, a significant drop from the 19% growth in fiscal 2025 [7]. - The Zacks Consensus Estimate for revenues stands at $2.26 billion, reflecting a year-over-year growth of 12.88% [7]. Earnings Outlook - The consensus estimate for earnings is $2.66 per share, revised down by 2.2% in the last 30 days, indicating a year-over-year decline of 27.32% [8]. - MongoDB has consistently beaten earnings estimates in the past four quarters, with an average surprise of 62.04% [8]. Investment Recommendation - Given the competitive pressures, declining margins, and weaker revenue guidance, it is suggested that investors consider selling MongoDB stock [9][10].