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For those in the software development community, MongoDB (NASDAQ:MDB) has been a breath of fresh air that has redesigned how developers can take large amounts of data and analyze them for the application code. For those not in the software development community, explaining what MongoDB does can be a little more tricky. Essentially, MongoDB has created a document-based database program rather than using the traditional data structure that requires much more work on the developer’s end. The program allows users to perform tasks such as ad hoc queries and real time aggregation to make analyzing data a much more streamlined job.
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MongoDb has also been a strong performing stock since the company made its public debut back in October of 2017. Shares hit the market at a very reasonable price of $24 per share, and has already returned more than ten times that as the stock is trading at around $315 per share at the time of this writing. Despite the high valuation, the company only has a market cap of $19 billion, making it a prime candidate to grow by ten times again in the future. The stock has a 52-week trading range of $147.29 to $428.96, which means shares are currently trading at a near 30% discount from the 52-week highs.

The Bullish Case: MongoDB is near universally adored by software developers, as it provides a scalable and highly efficient way of analyzing large amounts of data in no time at all. The company has built a strong stable of partners that range from Chinese tech conglomerate AliBaba 

(NYSE:BABA) to clients such as Bosch, ThermoFisher Scientific (NYSE:TMO), Expedia (NASDAQ:EXPE), Alphabet (NASDAQ:GOOGL), and European eCommerce platform Otto. MongoDB has several different products including its cloud database service MongoDB Atlas, which uses data distribution and mobility across the big names like Amazon (NASDAQ:AMZN) Web Services, Google Cloud, and Microsoft (NASDAQ:MSFT) Azure. MongoDB Realm allows developers to create better, faster apps for mobile phones and other connected devices, and MongoDB Compass allows for lightning fast data queries, while gaining immediate access to server status and your query performance. MongoDB has a full roster of software that it charges as a recurring revenue subscription service, so as its client base grows, so too should its top and bottom lines.

The Bearish Case: MongoDB has a unique software that makes data analysis for application code a streamlined process. That in itself is a very strong industry moat that should remain relatively unchallenged unless one of the big tech giants decides to get into the space with a similar process. MongoDB’s other products do face stiff competition, specifically from companies like Snowflake (NYSE:SNOW), which is generally the preferred program over MongoDB Atlas. While revenues in its most recent quarter grew by 40% year over year, gross margins fell and losses rose in an environment where tech companies were blowing the doors off of their earnings. This could represent some plateauing of the company’s financial operations, although the guidance that was issued for 2022 was very positive as MongoDB is projecting another massive bump in revenues from $590 million to $765 million.

Final Verdict on MongoDB: It’s hard not to love this company, especially considering the strong moat and clientbase it already has. The SaaS revenue model is proven, and MongoDB has improved its revenues like clockwork year after year. The stock may seem expensive, but it is because it is a company with a low share float, so the price can be driven up and down easier than for companies with a large share float. Ignore the stock price and look into the performance of the company and where it will go from here. MongoDB represents a nice value at current price levels after its recent correction.

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