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The last three months have been tough on MongoDB, Inc. (NASDAQ:MDB) shareholders, who have seen the share price decline a rather worrying 31%. But over three years the performance has been really wonderful. Over that time, we've been excited to watch the share price climb an impressive 560%. So you might argue that the recent reduction in the share price is unremarkable in light of the longer term performance. Only time will tell if there is still too much optimism currently reflected in the share price.
Anyone who held for that rewarding ride would probably be keen to talk about it.
MongoDB isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
Over the last three years MongoDB has grown its revenue at 41% annually. That's much better than most loss-making companies. In light of this attractive revenue growth, it seems somewhat appropriate that the share price has been rocketing, boasting a gain of 88% per year, over the same period. It's always tempting to take profits after a share price gain like that, but high-growth companies like MongoDB can sometimes sustain strong growth for many years. So we'd recommend you take a closer look at this one, or even put it on your watchlist.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
MongoDB is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. So we recommend checking out this free report showing consensus forecasts
A Different Perspective
While the market return was 55% in the last year, MongoDB returned 59% to shareholders. It has to be noted that the recent return falls short of the 88% shareholders have gained each year, over the last three years. Share price gains are anything but steady, so it's a positive to see that the longer term returns are reasonable. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. To that end, you should learn about the 5 warning signs we've spotted with MongoDB (including 1 which is significant) .
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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