What Happened:
Shares of database software company MongoDB (MDB) jumped 6% in the morning session after Loop Capital analyst initiated coverage on the stock with a Buy rating and assigned a price target of $415. The price target indicates a potential 15% upside from where shares traded when the upgrade was announced.
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What is the market telling us:
MongoDB's shares are very volatile and over the last year have had 22 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 11 months ago, when the stock gained 16.5% on the news that the company reported a "beat and raise" quarter. First quarter results beat analysts' expectations for revenue, gross margin, free cash flow, and earnings per share. Guidance was also strong. Revenue guidance for the next quarter exceeded expectations. The full year guidance was raised and also came in ahead of Consensus. The profitability guidance was similarly impressive as operating income guidance for the next quarter and full year came in ahead. The company touched on the current AI trend noting that "...MongoDB's developer data platform is well positioned to benefit from the next wave of AI applications in the years to come". Overall it was a strong quarter for the company with solid results and impressive guidance.
MongoDB is down 6% since the beginning of the year, and at $360.71 per share it is trading 28% below its 52-week high of $500.90 from February 2024. Investors who bought $1,000 worth of MongoDB's shares 5 years ago would now be looking at an investment worth $2,626.
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