MongoDB (MDB)
Software / Bases de datos / Nube
Document database platform with exceptional developer adoption and a 121% net expansion rate on recurring revenue, priced for accounting profitability that does not yet exist: No margin of safety: the price already discounts a demanding scenario., with an estimated return of -9% annually over five years.
- Price
- $406.48
- Intrinsic value (5y, base)
- $252
- Total annual return (5y)
- -9.1%
- Status (nominal)
- Overvalued
- Margin of safety
- No margin
The essentials
- Revenue growth of 23.6% over the last twelve months, with a 121% net expansion rate on recurring revenue showing that the installed base grows on its own.
- Stock-based compensation equals 21.4% of revenue and 94% of free cash flow: reported cash flow is not the owner's economics, and the valuation runs on owner earnings, that is, operating cash flow net of stock-based compensation and of maintenance investment.
- Balance sheet with no financial debt and US$2,427 million between cash and short-term investments; shares outstanding held flat in fiscal 2026 because the buyback fully absorbed the issuance from awards and from the Voyage AI acquisition.
- Accounting operating income remains negative (guided between −US$78 and −US$58 million for fiscal 2027); return on invested capital is below the method's 10% bar.
- At $406 per share, the estimated five-year return is -9% annually: Overvalued.
Intrinsic value — two valuation methods
By both methods, the value today (DCF $77 · Multiples $202) is below the market price ($406).
Pillars of the analysis
The verdict — today vs 5 years
Today — expensive, no margin of safety: at $406 trades ~101.0% above its value discounted to today (~$202); 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 ~$125.
Thesis
The business
This is a high-quality subscription business in its commercial operation: capital-light, with a 121% net expansion rate on recurring revenue, more than 65,200 customers, and revenue growth of 23.6% over the last twelve months. The objection is not to demand but to the economics that reach the shareholder: stock-based compensation equals 21.4% of revenue and consumes 94% of free cash flow, so the accounting result has only now crossed into positive territory, nearly nine years after the IPO: after four consecutive fiscal years of accounting losses, the first quarter of fiscal 2027 produced net income of US$4.4 million.
The valuation
The valuation runs on a multiple of owner earnings: operating cash flow net of stock-based compensation, less maintenance investment. This is the metric that fits a subscription platform with no material physical capital and with that line item weighing more than a fifth of revenue. The path starts from fiscal 2027 guidance and decelerates smoothly to a durable low-double-digit growth rate by year five, with the accounting net margin rising as stock-based compensation recedes as a percentage of revenue, as it has been doing since 2023. On that basis, the five-year value is $252 per share, against a price of $406.
The margin of safety
No margin of safety: the price already discounts a demanding scenario. The estimated return at market price is -9% annually, entirely from price appreciation (-9%), because the company does not pay a dividend. To require the method's 15% annual hurdle, the maximum price to pay would be -224%. The favorable scenario, which assumes sustained growth above 17% and a cash margin net of stock-based compensation of 19.5% by year five, still does not clear the current price: it returns -9% annually.
What to watch
The disconfirming test is the trajectory of stock-based compensation as a percentage of revenue: it has been receding by about two points a year since 2023, and the entire conversion of growth into earnings depends on that continuing. The second indicator is Atlas consumption, which is billed by usage and today accounts for nearly three quarters of revenue: a slowdown in consumption shows up in remaining performance obligations before it shows up in the income statement.
Educational / informational. Does not constitute investment advice.