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Scalable database provider MongoDB (Nasdaq: MDB) suffered a 36% stock drop over a month. Presently priced at $188.81 per share, MDB stock is far from its all-time high of $585 in November 2021. Likewise, over the last 52 weeks, the average MDB share price hovered at $281 per share.

MongoDB’s present stock price level is a return to January 2023. However, MDB stock is known for its rallies, having even come close to its ATH at $486 in February 2024.

Is this the moment retail investors have been waiting for, buying low in anticipation for another rally, or are MongoDB fundamentals less sound than they appear?

MongoDB Positioning Among the Big Tech

Not only does Big Tech boost Nvidia’s valuation as hyperscalers for AI data centers, but it also offers a similar database management service as MongoDB. Case in point, Microsoft’s Azure Cosmos DB offers low latency multi modal support for data models as a turnkey solution.

Similarly, Amazon has DynamoDB as another serverless NoSQL solution that is fully managed, making it convenient for launching internet apps at scale. Given the deep pockets of these Big Tech companies, and their expected reliability, where does MongoDB fit into this market?

MongoDB should be understood as complementary, providing access to all major cloud infrastructures, Amazon’s AWS, Microsoft’s Azure and Google’s GCP. In fact, using the company’s Atlas platform, clients could opt for all three simultaneously based on regional availability and performance.

Moreover, while being cloud-native and attached to Big Tech, clients could opt for on-premises deployment for a private data center or have a hybrid setup. The convenience factor is carried over, as MongoDB Atlas scales automatically by vertically allocating computational resources. Horizontally, the platform offers sharding of datasets across multiple servers.

Compounding this flexibility, MongoDB offers an attractive pay-as-you-go pricing model as a mid range option while the high range is only $30 per month, outside Enterprise Advanced pricing. And while not fully open source, MongoDB’s Community Edition is license-free and use-free.

But the question is, has MongoDB found the right balance between pricing and profitability?

MongoDB’s Profitability Milestone and Concerns

At the end of January 2025, the company attracted over 54,500 clients, mostly using its platform for software development, machine learning, artificial intelligence and web development. The bulk of MongoDB customers run a small business, up to 50 employees, which makes sense given the attractive pricing.

In terms of financials, this translated to a double-digit revenue growth to $548.4 million, at 20% year-over-year according to the early March earnings report for fiscal Q4 2025. The company’s Atlas platform made 71% of the total revenue, having grown 24% yoy. 

However, there is a cost in this revenue expansion. Compared to a year-ago quarter, MongoDB’s gross margin actually dropped, from 75% to 73%. Even though it seems minor, it does raise concern if MongoDB can keep up with running costs. 

Likewise, the company is yet to enter sustained profitability territory. The latest reported fiscal Q4 ’25 is MongoDB’s first profitable quarter, at $15.8 million net income compared to the year-ago’s net loss of $55.5 million. But it is yet to be determined if following quarters will trend upwards or downwards.

What is clear is that the company is burning cash, having halved its free cash flow to $22.9 million from $50.5 million in the year-ago quarter. Overall, MongoDB has a $1.8 billion accumulated deficit against the equity value of $2.7 billion and total current liabilities worth $561.9 million.

This makes the current MDB valuation around 5x its book value. 

MongoDB’s “Buy the Dip” Moment Amid Firm’s Strategic Dealmaking?

MongoDB is still a mixed bag, but this makes it ripe for speculative high-growth investing. The sustained customer growth is positive, as well as the first profitable quarter, somewhat overshadowed by lower gross margin and free cash flow.

At the same time, MongoDB’s acquisition of Voyage AI this February is a significant step in the right direction. The AI hype keeps driving data center/management growth, but is also curtailed by the notorious AI confabulation. The Voyage AI team has been working hard to remedy that problem.

“By bringing the power of advanced AI-powered search and retrieval to our highly flexible database, the combination of MongoDB and Voyage AI enables enterprises to easily build trustworthy AI-powered applications that drive meaningful business impact. With this acquisition, MongoDB is redefining what’s required of the database for the AI era.”

Dev Ittycheria, CEO of MongoDB

If MongoDB becomes known as the go-to database layer for robust AI app launches, this will be reflected in MDB stock. Following the recent wider stock market correction, this makes MDB a compelling exposure at the moment. 

Keeping the risks in mind, the average MDB price target is substantially higher than the present price of $188.81, at $300.46 per share. Likewise, the low estimate is also higher, at $215, according to WSJ forecasting data.

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