At its annual New York conference on Wednesday, MongoDB Inc. MDB laid out growth targets that suggest its core database business won’t be the only engine powering results ahead. Management pointed to emerging technologies and customer shifts that could add momentum on top of its steady revenue outlook.
The company projected high-teens revenue growth for the next three to five years and announced plans to continue investing in the business, according to Needham.
The MongoDB Analyst: Analyst Mike Cikos maintained a Buy rating, while raising the price target from $325 to $365.
The MongoDB Thesis: MongoDB projected average high-teens year-on-year revenue growth, driven by Atlas growth of over 20%, operating margin of over 20% and more than 80% free cash flow conversion, Cikos said in the note.
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“Management was clear these targets are baseline targets,” he wrote, while adding, “Both AI and competitive migrations represent incremental growth vectors.”
MongoDB intends to continue investing in the business, keeping the pace at a slower rate than its revenue and gross profit growth, the analyst stated.
He further said, “We left incrementally more positive on MongoDB’s AI positioning,” especially as this relates to:
- Embeddings, which bridge data and Large Language Models (LLMs)
- The ongoing integration of Voyage’s best-in-class models
- Migrations from legacy Relational databases that are difficult to scale
MDB Price Action: Shares of MongoDB had risen by 0.64% to $318.34 at the time of publication on Friday.
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