Couchbase’s Mixed Signals: Strong Quarter Yet Cautious Outlook

Sanjit Singh, an analyst from Morgan Stanley, maintained the Hold rating on Couchbase (BASE – Research Report). The associated price target was lowered to $23.00.

Sanjit Singh has given his Hold rating due to a combination of factors that reflect both positive performance and areas of caution for Couchbase. The company delivered its strongest quarter of the year with impressive growth in annual recurring revenue (ARR) and significant contributions from its managed cloud offering, Capella. This was coupled with a solid increase in the number of large spending customers, indicating a healthy expansion of its customer base.
However, despite these positive developments, Singh remains cautious. The company’s future ARR growth guidance, while better than anticipated, still suggests a slower pace of revenue growth. Additionally, there is a need to observe further growth in Capella to ensure sustained performance. These mixed signals lead Singh to maintain a Hold rating as he awaits clearer indications of consistent growth momentum.