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MongoDB (MDB) to Report Q1 Earnings: What's in the Cards?

Zacks Equity Research

MongoDB MDB is set to report first-quarter fiscal 2020 results on Jun 5.

In the fourth quarter of fiscal 2019, the company reported adjusted loss of 17 cents per share that was narrower than the Zacks Consensus Estimate of a loss of 38 cents and the year-ago quarter’s loss of 27 cents.

Revenues of $85.5 million also topped the consensus mark of $74 million and soared 70.8% on a year-over-year basis. Strong top-line growth was primarily driven by robust subscription revenues.

For first-quarter fiscal 2020, revenues are expected between $80 million and $84 million. Non-GAAP loss is anticipated between 25 cents and 23 cents per share.

The Zacks Consensus Estimate is currently pegged at a loss of 24 cents, unchanged over the past 30 days. The consensus mark for revenues currently stands at $83.2 million, indicating growth of 72.5% from the figure reported in the year-ago quarter.

MongoDB, Inc. Price and EPS Surprise

MongoDB, Inc. Price and EPS Surprise

MongoDB, Inc. price-eps-surprise | MongoDB, Inc. Quote

Let’s see how things are shaping up for this announcement.

Factors to Watch Out

MongoDB’s upcoming quarterly results are expected to benefit from an expanding customer base, driven by core database strength.

Availability of Atlas in 60 regions, and the ability to run across Amazon Web Services (AWS), Microsoft Azure and Alphabet GOOGL division Google Cloud are attracting customers.

In this regard, the company inked a new business partnership with Google Cloud Platform (GCP) during the to-be-reported quarter. The partnership is expected to boost MongoDB’s customer base.

However, intensifying competition from legacy and cloud-based database providers is a headwind. The launch of DocumentDB by Amazon intensifies competition for MongoDB.

Realm Acquisition

On Apr 24, 2019, MongoDB announced the acquisition of Realm for $39 million in cash, subject to certain adjustments. The acquisition is expected to close in the second quarter of fiscal 2020. The deal is expected to strengthen MongoDB’s relationship with developers.

Notably, the acquisition of mLab is helping the company build deeper relationships with developer-centric startup communities. mLab is also known for providing exemplary customer support that is expected to benefit MongoDB in attracting new clients.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. The Sell-rated stocks (Zacks Rank #4 or #5) are best avoided.

MongoDB has a Zacks Rank #3 and an Earnings ESP of 0.00%.You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With Favorable Combination

Here are a couple of stocks you may also want to consider, as our model shows that these have the right combination of elements to post an earnings beat.

Ambarella AMBA has an Earnings ESP of +100.00% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Science Applications International SAIC has an Earnings ESP of +2.82% and a Zacks Rank #3.

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