Top Analyst Downgrades MongoDB Stock (MDB) Ahead of Q1 Results

A top analyst from Loop Capital downgraded MongoDB (MDB) stock to Hold from Buy, citing the “lackluster” market adoption of the database software maker’s Atlas platform. Loop Capital analyst Yun Kim drastically slashed MDB stock’s price target to $190 from $350. Kim’s rating downgrade comes ahead of MongoDB’s Q1 results scheduled in early June.

Currently, analyst expects a 29.4% rise in MongoDB’s Q1 EPS (earnings per share) to $0.66, with revenue expected to rise 17.2% to $528 million.

Here’s Why Loop Capital Downgraded MongoDB Stock

Kim highlighted concerns over the slowing adoption of MongoDB’s Atlas platform, as indicated by Loop Capital’s recent industry checks. The 5-star analyst cautioned that this decelerating trend could continue, resulting in the slower ramp of AI-related workloads on the Atlas platform.

The analyst also warned that while AI hype continues to grow, MongoDB may not see a proportional benefit from it in the near term. Kim pointed out that MongoDB’s target market for cloud database platforms remains “highly fragmented,” and enterprises might not consolidate and standardize on a single platform like MongoDB for all AI deployments.

He added that industry contacts told Loop Capital that large enterprises may be less inclined to consolidate their database platforms as generative AI is reducing development complexity. “This could lead to organizations opting for low-cost alternatives, including open source platforms such as PostgreSQL,” said Kim.

While Kim recognized MongoDB’s long-term strengths, like a large, loyal base of more than 7 million developers, he highlighted short-term risks, including transition-related uncertainty, as new CFO Mike Berry joins the company later this month. While the analyst maintained Q1 estimates, he lowered his expectations for Atlas’ growth trajectory, noting persistent weakness in new workloads and a slower AI ramp.  

Kim ranks 435 out of more than 9,550 analysts tracked by TipRanks. He has a success rate of 61%, with a one-year average return per rating of 13.7%.

Is MongoDB a Good Stock to Buy?

Unlike Kim, several analysts remain bullish on MongoDB’s growth prospects. With 23 Buys and seven Holds, MongoDB stock scores Wall Street’s Strong Buy consensus rating. The average MDB stock price target of $269.74 implies about 43% upside potential from current levels. MDB stock is down about 19% year-to-date.

See more MDB analyst ratings