MongoDB Stock Has Soared This Year. Is It Too Late to Buy?

Core Insights - MongoDB's Atlas revenue is experiencing significant growth, leading to a substantial increase in stock price, with shares up over 70% year to date [1][2] - The company reported a 19% year-over-year revenue increase to approximately $628 million in fiscal Q3, with Atlas revenue growing 30% and accounting for 75% of total revenue [2][4] - Management has raised its full-year fiscal 2026 revenue guidance to between $2.434 billion and $2.439 billion, indicating a projected growth of about 21% compared to the previous fiscal year [5] Financial Performance - Non-GAAP income from operations reached about $123.1 million, an increase from $101.5 million in the same quarter last year, although the company reported a small net loss on a GAAP basis [4] - Free cash flow for the quarter was $140.1 million, significantly up from $34.6 million in the same period last year [4] Growth Trends - Despite strong results, revenue growth decelerated from 24% in Q2 to 19% in Q3 of fiscal 2026, raising questions about sustainability [6] - The stock currently trades at 12 times sales, suggesting that MongoDB needs to maintain around 20% revenue growth for the foreseeable future to justify its valuation [7] Competitive Landscape - MongoDB faces competition from major cloud providers like Amazon and Microsoft, as well as from Snowflake, which could impact its growth trajectory [8] - The company's business model remains unprofitable on a GAAP basis, which complicates the justification for its current market capitalization of $33 billion [9]