MongoDB Stock Plunges 54% in a Year: Here's Why You Should Stay Away

MongoDB MDB shares have plunged 54.1% in the trailing 12 months, underperforming the Zacks Computer and Technology sector, the S&P 500 index and the Zacks Internet - Software industry’s return of 3.1%, 6.9% and 10.4%, respectively.The company is facing a challenging near-term landscape due to an uncertain macroeconomic climate and rising competitive pressures. The stock has also been swept up in the broader market sell-off, driven by concerns over reduced consumer demand and the trade war. Let’s take a closer look at the key factors weighing on the stock, which should serve as a warning for investors.MDB’s Competition is a ChallengeMongoDB faces tough competition from companies like Amazon’s AMZN DynamoDB, Couchbase BASE and Oracle ORCL, among others. Amazon DynamoDB is a fast NoSQL database, ideal for apps needing quick reads and writes with real-time data access. Oracle Database offers strong indexing and query optimization, making it great for fast and efficient data retrieval. Couchbase performs well in high-speed, offline, and mobile-first environments. It also has built-in caching for faster data access and uses an SQL-like query language. Shares of Oracle have gained 10.1% in the trailing 12 months, while Amazon and Couchbase have lost 2.7% and 40%, respectively.This competitive landscape puts pressure on MongoDB’s market share and growth potential, especially as rivals continue to enhance performance and integration features. With stronger-performing peers gaining market share, MDB’s positioning appears increasingly vulnerable.MongoDB, Inc. Price and Consensus MongoDB, Inc. price-consensus-chart | MongoDB, Inc. QuoteMDB’s Margins and Growth Trajectory Raise ConcernsMongoDB’s operating margin is expected to decline from 15% in fiscal 2025 to 10% in fiscal 2026, signalling a weakening profitability trend. The drop is largely due to the $50 million high-margin, multiyear license revenues that were incurred in fiscal 2025 and won’t repeat again, and increased spending on R&D and marketing initiatives. These investments, including the $220 million Voyage AI acquisition, are unlikely to drive immediate returns.Moreover, the company’s gross margin slipped from 77% to 75% in fiscal 2025, as Atlas, MongoDB’s lower-margin cloud product, now accounts for 71% of revenues. Despite its scale, Atlas’ growth is expected to remain flat year over year. Meanwhile, the non-Atlas business continues to decline, adding to growth headwinds in fiscal 2026.MDB Offers Disappointing Fiscal 2026 GuidanceFor fiscal 2026, the company projects revenues between $2.24 billion and $2.28 billion, reflecting a modest 12.4% year-over-year growth at the midpoint, down sharply from 19% year-over-year growth recorded in fiscal 2025. The Zacks Consensus Estimate for revenues is pinned at $2.26 billion, implying year-over-year growth of 12.88%.The consensus mark for earnings is pegged at $2.66 per share, which has been revised downward by 2.2% over the past 30 days, indicating a year-over-year decline of 27.32%.MDB beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, with the average surprise being 62.04%.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.Conclusion: Time to Sell MDB StockGiven the intense competition, pressured margins, weaker revenue guidance and broader market pressures, it appears prudent for investors to sell MongoDB stock for now. The company’s non-Atlas revenues are declining, free cash flow has nearly halved, and operating margins are under pressure. With high R&D spending offering limited short-term returns and Atlas growth stalling, MongoDB faces too many headwinds to justify holding the stock in the near term. MDB currently carries a Zacks Rank #4 (Sell), suggesting that it may be wise for investors to stay away from the stock for the time being.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Amazon.com, Inc. (AMZN): Free Stock Analysis Report Oracle Corporation (ORCL): Free Stock Analysis Report MongoDB, Inc. (MDB): Free Stock Analysis Report Couchbase, Inc. (BASE): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks