MongoDB (MDB)

By both methods, the value today (DCF $206 · Multiples $188) is below the market price ($381).

Today — expensive, no margin of safety: at $381 trades ~103.1% above its value discounted to today (~$188); the expected return does not even reach the risk-free rate (4.5%).

At 5 years — Sobrevalorado: the expected total return is negative — the price already discounts a demanding scenario that, if not met, results in a loss.

The bridge: the return at 5 years falls below the risk-free rate (4.5%) — which is why there is not even a discount to today's value. To require a 15% annual return, it would need to be bought at ~$116.

Educational / informational. Does not constitute investment advice.

The inverse approach: instead of projecting growth to obtain the value, the market price ($381) is taken as given and it solves for what annual owner-earnings growth would need to hold for 5 years for the present value —at the method's rate (4.5%, no-growth terminal)— to equal that price. It is the disconfirmation test: the expectations the price already pays for, contrasted against the method's projection.

The price discounts growth (75.8%/year) above our base case (55.0%/year) → it is priced for a demanding scenario and leaves little cushion against a slowdown.

That growth implies ~$1.6 bn of owner earnings in year 5 (vs ~$0.8 bn of our base case). It recalculates if the DCF assumptions are edited.

Year-by-year projection of the selected scenario. From each year, two versions of the flow are derived: growth FCF (operating flow − total capex, the cash surplus) and maintenance FCF (the owner earnings: what the business yields if it only sustains its capacity). The flow is returned almost in full (dividend + buyback) or redeployed into the operation, so that EV stays roughly flat and multiples compress because the metric grows, not because of cash accumulation. The valuation is done on NOPAT (EV/NOPAT). In edit mode, revenue, margins, capex, and exit multiples can be adjusted.

MongoDB is valued at the enterprise level, on a multiple over after-tax operating income — a metric that expenses stock-based compensation, just like the owner earnings it used before, and is also pre-interest, so the US$2,411 million of cash enters the bridge and its yield is not counted twice — rather than on reported free cash flow. The reason is stock-based compensation: 20.3% of revenue and 86% of free cash flow over the trailing twelve months, so reported free cash flow hands the numerator back a real personnel cost. That is why the model's operating cash flow margin path runs net of that item: it starts at 1.6% over the trailing twelve months, not the reported 22.9%. The present-value lens, by contrast, discounts owner earnings (free cash flow net of stock-based compensation), which do include interest earned on cash, so it does not add the cash balance: that would double-count the same asset. The net margin series is kept so the GAAP result stays visible alongside it. No normalized tax rate is applied to operating income: MongoDB carries an accumulated deficit of US$1,907 million and records only foreign and state taxes, so no rate is derived that the filing does not publish. Capital expenditure, at 0.2% of revenue, is treated entirely as maintenance. Year one starts from fiscal 2027 guidance raised on September 1, 2026 (revenue of US$2,990 to 3,030 million and GAAP earnings per share of US$0.15 to 0.39), shifted one quarter to align with the rolling twelve-month window. The change in working capital is taken at zero: the extraction does not provide the detail and no value is imputed without a source. The exit multiple falls within the 20-to-30-times band of the enterprise software archetype, at a middle position given the contrast between a long growth runway and a return on capital that is still negative.

Today's elevated multiple is the price of growth: if the business grows, the entry point cheapens on its own going forward (the metric grows while EV stays roughly flat). The exit multiple at 3 years is higher than the terminal at 5 years —at 3 years there is more growth still ahead—, so the value curve shows whether value creation is concentrated in the early or the later years. The required return is applied to the base scenario.

They are valued separately, with their own rationale, and are not incorporated into the base or the verdict (they are excess return). When assigning them value — in Editmode —, the total with optionalities updates live, without moving the base.

The verdict, the base CAGR, and the margin of safety are always calculated on the base; optionalities do not alter them (with optionalities at $0 they do not move).

Each card fixes a required annual return and answers: if the business is worth $234 in 5 years, what is the maximum that can be paid today to obtain that return? Since it now trades at $381, the margin of safety is how much cheaper the market is than that maximum. The three thresholds: 4% covers inflation (the floor), 10% is the long-term average return, and 15% is the level of a great investment.

With a target price of $234 in 5 years and a required return of 4.5% annually, the maximum to pay today is $188. Against the current market price ($381), the margin of safety is -103.1% (trades above the maximum → a premium is paid) and the total return at that price would be -9.3% annually.

• Entry multiple. Trailing twelve-month operating income is negative once stock-based compensation is expensed, so today's entry multiple is not interpretable and the row starts at three years, at 41× in year 5: the price is not buying today's flow but the projected margin expansion.
• Exit multiple. 24 times year-five after-tax operating income is applied, at the midpoint of the 20-to-30-times band for the enterprise-software archetype.
• Estimated return. -9% annually over five years at market price, entirely from price appreciation: the company does not pay a dividend.
• Favorable scenario. Even with growth above 17% annually and a cash margin net of stock-based compensation of 19.5% by year five, the return is -9% annually.
• Contrast between methods. The present value of owner earnings comes in below the multiples-based value, because the starting cash flow is close to zero once stock-based compensation is expensed.

Each margin over sales, year by year: historical (solid line) → projection (dotted).

• ✕ ROIC exceeds the cost of capital (~10%)
• ✕ CFROIC backs up the ROIC (0%, cash vs. accruals)
• ✓ Healthy balance sheet (low corporate debt)
• ✓ Durable competitive moat (multiple advantages)

• Return on capital. Accounting operating income is negative, so return on invested capital sits below the method's 10% bar.
• Cash generation. Operating cash flow of US$597 million over the last twelve months, but US$556 million corresponds to the add-back of stock-based compensation.
• Earnings quality. The difference between the adjusted result and the accounting result is almost entirely stock-based compensation, a real cost paid in equity.
• Reinvestment runway. The company states it still represents a small portion of its largest customers' database spend, and the projected market grows from US$93 billion to around US$169 billion by 2029.
• Capital intensity. Invested capital of US$508 million against revenue of US$2,783 million: the business is genuinely capital-light.

Annual levels from the official filing (10-K); the % over each bar is the year-over-year (YoY) growth vs the prior year.

MongoDB's revenue breaks down by consumption customers: Atlas bills on managed-platform usage, so the driver is the number of applications in production multiplied by the consumption each one generates, and the visible lever for that product is the net expansion rate on recurring revenue, at 121% at fiscal year-end. Enterprise Advanced, by contrast, bills a license per deployment and behaves like a traditional annual-renewal subscription. Remaining performance obligations function as a leading indicator of contracted, unrecognized revenue: they anticipate acceleration or deceleration before it appears in the income statement, although they are not valued separately.

The % are the annual (year-over-year) growth: each year —historical and projected— vs the prior one; the TTM (trailing 12m) vs the TTM of a year ago, to avoid overlapping windows. The historicals are exact figures from the official filings; the projected years come from the year-by-year model (the intermediate years without their own series are interpolated between the anchors). The projected columns (+1y…+5y) are 12-month windows counted from the TTM close (31-jul-2026): the projection starts from the most recently reported data, not the fiscal year. The projected base is realistic and unbiased — the risk discount is applied at the end, via the required return. The rationale for each metric is in the (i).

• Revenue growth. 25.5% over the last twelve months, on a trajectory of 31.1%, 19.2%, and 22.8% over the prior three fiscal years.
• Expansion within the base. Net expansion rate on recurring revenue of 121% at fiscal year-end.
• Contracted revenue. Remaining performance obligations grew 88% year over year within fiscal 2026 (US$776 million to US$1,472.7 million), but the level fell 1.0% in the following quarter (to US$1,458.6 million): the leading indicator is not accelerating today.
• Company guidance. Fiscal 2027 guidance implies revenue of US$2,990 to 3,030 million (deceleration to roughly 19%) and GAAP earnings per share of US$0.15 to 0.39; GAAP operating income, however, is still guided negative, between −US$28 and −US$8 million.
• Product mix. The self-managed license loses share year after year and grows at a mid-single-digit rate, while the managed service advances near 28%.

• Revenue recurrence. Revenue entirely from subscription, with more than 65,200 customers and none above 10% of revenue.
• Differentiated product. Proprietary document architecture, distinct from the legacy relational engine, with retained intellectual property.
• Pricing power. The 121% net expansion rests on rising consumption rather than price increases; the filing provides no evidence of rate hikes.
• Revenue predictability. 73% of revenue comes from Atlas, which is billed mainly by consumption, and the report itself warns that visibility into the timing of recognition is limited and that future revenue may become less predictable.
• Operating leverage. Capital expenditure equals 0.2% of revenue: growth does not require physical capital.

• ✓Leverage (net debt / EBITDA)Net cash $0 bn
• –Interest coverage (EBIT / interest)no data
• –Liquidity (current ratio)no data
• –Cash quality (CFROIC vs ROIC)ROIC ≤ 0 (see value creation)
• ✕Value creation (ROIC − 10% bar)-13pp
• ✓Malinvestment test (capex vs incremental ROIC)Capex/D&A 0.3x — no over-investment
• –Float / working capitalNeutral WC
• ✕Dilution (SBC % of revenue + shares)SBC 20.3% of revenue

A traffic-light interpreted by the method (not generic): float (negative WC) adds up, capex is judged by incremental ROIC (malinvestment test), and a lender is not subjected to corporate solvency. The (i) shows the derivation of each number.

• Financial debt. No long-term or short-term financial debt.
• Liquidity. US$1,036 million of cash and US$1,391 million of short-term investments as of April 30, 2026.
• Accumulated deficit. US$1,907 million accumulated since founding as of April 30, 2026 (US$1,912 million at the close of fiscal 2026), funded with equity issuance.
• Capacity commitments. Non-cancelable multi-year commitments with cloud providers, payable regardless of actual usage.

How cash comes in and how it is deployed. In green, the business's own cash (the owner-FCF it generates and reinvests); in gray, the float and credit — customer and funding money, which is not the shareholder's.

The breakdown reflects capital deployed in fiscal 2026 and its economic nature. The US$400.3 million buyback is the largest single use, but it does not reduce the share count: diluted shares still grew, so it functions as a partial offset to the dilution from stock-based compensation. The US$160.9 million Voyage AI acquisition is the period's only mergers-and-acquisitions transaction. Reinvestment shows up with meaningful weight even though capital expenditure is minimal, because in this business growth investment travels through the income statement in research and development and in sales and marketing, not through the balance sheet. There is no dividend.

Who owns the shares — the alignment and whether there is a controlling shareholder.

• Reinvestment in the product. The US$160.9 million Voyage AI acquisition added embedding and reranking models to the core of the platform.
• Share buybacks. US$400.3 million in fiscal 2026 at an average price of US$306.87 per share, below the current price.
• Net dilution. Shares outstanding held flat in fiscal 2026 (80.47 to 80.49 million): the buyback plus the share settlement of the capped call on the convertible notes fully absorbed the issuance from awards and from the Voyage AI acquisition. The jump in diluted weighted-average shares from 74.6 to 81.2 million is the full-year effect of the December 2024 convertible-note conversion, a value-neutral transaction, not dilution in the period.
• Capital structure. No financial debt and US$2,411 million in cash and short-term investments.
• Shareholder distributions. No dividends declared or paid; the company retains available funds for operations and expansion.

• The market values the company on adjusted results that exclude stock-based compensation, and that exclusion equals more than a fifth of revenue.
• The growth is real and verifiable: 25.5% over the last twelve months and a net expansion rate on recurring revenue of 121%, in a database market that the filing itself projects growing at a double-digit rate.
• The addition of vector search and the Voyage AI models positions the platform as a candidate to capture artificial-intelligence workloads without requiring a separate data system.
• Remaining performance obligations grew 88% year over year within fiscal 2026 on multi-year commitments, although the most recent level (April 30, 2026) fell 1.0% from the fiscal year-end.
• The debt-free balance sheet with material net cash removes financing risk and allows investment to be sustained even with a negative accounting result.

It would not be correct to present MongoDB as a company discounted by the market. The gap between perception and reality runs the other way: the price already prices in accounting profitability that does not yet exist and that the model only reaches later in the horizon. The source of the disagreement is methodological and explicit: whoever values the company on adjusted results gets earnings several times larger than the accounting figure, because the difference is exactly stock-based compensation, which this method treats as a cost of the period in which it is paid.

The annual return (CAGR at 5 years) in each scenario, with the total period return below — the margin of safety made visual: upside range wide, downside range narrow.

Even in the bear scenario, the return holds at -22%/year (-71% total): the margin of safety protects the downside. The bull (~0%/year, ~0% total) exceeds it comfortably — a favorable asymmetry, with a narrow downside range and a wide upside range.

• Cloud provider competition. Oracle, Microsoft, IBM, and the three major cloud operators have superior resources and can bundle database functionality at low or no cost.
• Consumption concentration. Atlas rose from 66% to 73% of revenue over two fiscal years and is billed by usage, which reduces predictability.
• Annual renewal. Most contracts run for a year and carry no obligation to renew.
• Community-edition license. The license has not been interpreted by courts; an adverse ruling would allow competing without licensing the software.
• Stock-based compensation. 20.3% of revenue and 86% of free cash flow: it is the line item that separates the adjusted result from the GAAP result.
• Persistent accounting losses. Net income was negative in all four reported fiscal years and over the trailing twelve months (−US$29.1 million), but the first quarter of fiscal 2027 crossed to positive (+US$4.4 million, US$0.05 per share) and full-year guidance is US$0.15 to 0.39 per share. Operating income, by contrast, remains negative and the company guides it between −US$28 and −US$8 million for fiscal 2027.

Each thinker's analytical framework applied to our data.

• Buffett / Graham Quality + margin of safety

  Fails the quality gate: ROIC -3% does not clear the 10% bar.

• Peter Lynch Growth at a reasonable price (GARP)

  A hyper-growth, growing 55% — no conclusive multiple/growth to judge the price.

• Joel Greenblatt Cheap and high-return (Magic Formula)

  ROIC -3%; earnings yield not computable (EBIT or EV not positive).

• Howard Marks Perception vs reality + cycle

  The price discounts 76% vs our 55%: priced for perfection, no favorable mispricing.

• Seth Klarman Capital protection (bear scenario)

  Bear-scenario floor -22%/yr over 5y (material loss) → risk of permanent capital loss.

• Pat Dorsey Moat strength (Five Rules)

  A narrow moat, stable; sources: switching costs, network effects, intangibles, efficient scale → partially passes the Five Rules.

• Aswath Damodaran Expectations implied by the price

  The price demands 76% growth, far above our 55% — heroic assumptions.