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Today we're going to take a look at the well-established MongoDB, Inc. (NASDAQ:MDB). The company's stock saw a significant share price rise of over 20% in the past couple of months on the NASDAQGM. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s take a look at MongoDB’s outlook and value based on the most recent financial data to see if the opportunity still exists.
See our latest analysis for MongoDB
What Is MongoDB Worth?
The stock is currently trading at US$323 on the share market, which means it is overvalued by 39% compared to my intrinsic value of $231.90. This means that the buying opportunity has probably disappeared for now. Another thing to keep in mind is that MongoDB’s share price is quite stable relative to the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.
What kind of growth will MongoDB generate?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. However, with a relatively muted profit growth of 9.7% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for MongoDB, at least in the short term.
What This Means For You
Are you a shareholder? It seems like the market has well and truly priced in MDB’s future outlook, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe MDB should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping tabs on MDB for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook means it’s worth diving deeper into other factors in order to take advantage of the next price drop.