Analysts Cautious as MongoDB Prepares to Report Q2 Earnings

As MongoDB (NASDAQ:MDB) gears up to release its Q2/24 earnings on August 29, after the market close, analysts from Morgan Stanley and Guggenheim have provided cautious yet optimistic insights into what investors might expect. Despite a challenging market environment, both firms believe the company's long-term prospects remain intact, though they differ slightly in their short-term outlooks.

Morgan Stanley advises investors to moderate their expectations for a significant rebound this quarter, highlighting ongoing headwinds and a slowdown in momentum. The firm's analysts note that MongoDB shares have underperformed, dropping 32% over the past three months as growth expectations were reset after Q1. They caution that Q2 is unlikely to see a rapid recovery, anticipating growth in line with last year's quarter-on-quarter Atlas revenue, suggesting a gradual rather than immediate resurgence.

Guggenheim, while more optimistic, also maintains a measured outlook. Guggenheim points to improved consumption trends in Q2, driven by better go-to-market execution and the adoption of new Atlas features like vector search and data lake capabilities. However, they acknowledge that the broader IT spending environment remains challenging, which could hinder a swift reacceleration in growth.

Both Morgan Stanley and Guggenheim agree that Q2 might mark the low point in revenue growth, with potential for improvement in the second half of the year.