This Database Leader In Buy Zone After Shares More Than Double

Feb 6, 2024

Several software stocks rallied in 2023, more than doubling in price. MongoDB (MDB) stock — which has rocketed more than 1,700% over its history — is one of the few near a buy point again now, making it Tuesday’s selection for IBD 50 Stocks To Watch.


MongoDB stock gained 108% in 2023 and is up another 10% thus far this year. Shares broke into a buy zone Tuesday out of a consolidation with a buy point of 442.84, according to IBD MarketSmith. The 44-day consolidation came after it formed a cup with handle that lasted 92 days.

Shares ventured into the buy zone for a second straight day, but have retreated again and sit just below the entry. The stock was down 1.3% in recent action.

The stock went public in 2017 at an initial offering price of $24, meaning the database leader has gained 1,714% since. Investors who bought $10,000 in MDB stock at the initial offering price would have seen the value of their holding rise to $181,000.

Sales and earnings growth have been steady over the past five quarters. For the company’s fiscal third quarter, sales of $432.8 million grew 30% while earnings per share of 96 cents soared 317% from the prior year.

But MongoDB stock fell Dec. 6 after those results were released, and it traded below the 50-day moving average briefly before retaking that key level. For the fourth quarter, the company expects 45 cents earnings per share on sales of $431 million at the midpoint.

MongoDB Stock Rises On Amazon Partnership

MongoDB provides tools and a platform for making software. The database platform works with Amazon‘s (AMZN) AWS, Alphabet‘s (GOOGL) Google Cloud and Microsoft‘s (MSFT) Azure. The company ranks second in the database software group.

MongoDB stock has a best-possible Composite Rating of 99 and Relative Strength Rating of 95. Further, its EPS Rating is 83.

In November, the database provider partnered with Amazon (AMZN) for the AI-powered Amazon CodeWhisperer that can make suggestions based on natural language comments or previously used code. The feature will allow coders to come up with ideas and develop applications faster.

More mutual funds have been buying shares of MongoDB stock in recent weeks, giving the stock an Accumulation/Distribution Rating of B. Funds have also been net buyers over the past three quarters and own 69% of outstanding shares. The Virtus KAR Mid-Cap Growth Fund (PHSKX) and the AllSpring Growth Fund (SGRAX) hold shares.

Among exchange traded funds, the iShares Russell Mid-Cap Growth ETF (IWP) and the Franklin Exponential Data ETF (XDAT) hold shares of MongoDB stock.

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