DA Davidson cuts MongoDB stock price target on valuation adjustment

DA Davidson has reduced its price target for MongoDB stock to $415, down from $465, while keeping a Buy rating for the database software company. Analyst Rudy Kessinger attended MongoDB's Investor Day and highlighted that MongoDB 9.0 is now available, offering faster query performance and better price-to-performance than version 8.0.

The stock has dropped 21% over the past week, yet it still has a market capitalization of $28.78 billion and achieved a 25% revenue increase. Despite the recent market fluctuations, InvestingPro analysis indicates that MongoDB remains undervalued compared to its Fair Value, as 30 analysts have recently revised their earnings upwards.

Investors have access to 14 more InvestingPro Tips and an analysis of the Most Undervalued stocks list. MongoDB recently introduced Atlas Infinite, Atlas Agent Engine, and a new partnership with Devin, which aim to enhance agentic workload capabilities and legacy database migration. The company also raised its enterprise agreement and growth targets, with Atlas growth now anticipated to reach the mid-20s percent range in the short term, following a more aggressive three-year timeline.

DA Davidson continues to recommend buying MongoDB stock despite this price target adjustment. Recently, MongoDB has faced scrutiny from other analysts following its fiscal 2027 analyst day and the recent change in CEO. Stifel decreased its price target to $385 from $465 and kept a Buy rating due to concerns over the transition strategy.

BMO Capital Markets lowered its price target to $420 from $450, but maintained an Outperform rating, citing risks associated with leadership changes. Piper Sandler kept its Overweight rating with a higher $470 price target, expressing confidence in MongoDB's growth prospects despite the CEO transition. RBC Capital Markets also maintained its Outperform rating and a $465 price target, pointing to the potential for substantial free cash flow by fiscal year 2030.

Meanwhile, Goldman Sachs highlighted MongoDB's strong fundamentals in the software sector, where the company is benefiting from AI-driven gains, such as increased annual recurring revenue and profitability.