Software concern MongoDB (MDB) — a Top Pick for 2023 — saw a revenue increase of 61% year-over-year from its Atlas database, observes Matthew Timpane, editor at Schaeffer's Investment Research.
The fully managed platform is a sought-after cloud database model that ensures customers don’t have to worry about upgrading or setting up new storage, as it will automatically scale.
The company also utilizes a consumption model for pricing, and consumption just saw an uptick. However, consumption remains well below historical levels and could be poised for a rebound if deep recessionary concerns are overblown.
A slew of key partnerships are also boosting the cloud concern, specifically with big names Amazon Web Services (AWS), Microsoft Azure, and Google Cloud. These partnerships should be a great benefit for growth in database and cloud integrations for MongoDB.
Some chart support could be coming into play for the shares, specifically the 2019 and 2020 $150 horizontal level of resistance. The stock is trying to approach and hold the $10 billion market cap level, while also finding a floor near $144 — six times its initial public offering (IPO) price.
Revenue for the company is expected to grow +28% in 2023, with a price/sales ratio of 9.03, which hasn’t been seen since 2018. An increase in revenue growth is also expected in the coming year.
In terms of technical analysis, brokerage firms are split, with a handful still sporting tepid "hold" or worse ratings. This not only leaves the tech name open to bull notes, but also perceptible to tailwinds, should any Fed updates or positive economic news come to light.
Short interest, meanwhile, rose 15.6% during the most recent reporting period and now accounts for just under 7% of the stock’s total available float. At MDB’s average pace of daily trading, it would take short sellers almost two days to buy back their bearish bets.
There also looks to be significant put open interest at the 185- and 200-strikes, which could prove supportive after the stock’s recent huge post-earnings bull run.
Lastly, our Schaeffer's Volatility Scorecard (SVS) is a lagging indicator that measures a stock's realized volatility against the volatility expectations priced into that stock's options over the past year. Schaeffer's Investment Research's goal is to find which stocks have been the best — and worst — for premium buyers.
The Schaeffer's Volatility Scorecard can be a very useful tool for premium sellers too, as "the worst" for a premium buyer can be construed as "the best" for a premium seller. Currently, MDB sports an SVS of 94 (out of 100), indicating the stock tends to outperform said expectations — a boon for options buyers.
