What to expect when MongoDB reports Q1 earnings tomorrow

MongoDB (NASDAQ: MDB) has made steady gains over the past 12 months, with the stock price soaring a staggering 170%, taking its market cap to $7.2 billion.  Investors will be looking at more steady gains as the company reports first-quarter results after the closing bell on Wednesday, June 5.

Analysts expect Q1 revenues to grow 72% year-over-year to $83.08 million, helped by an expanding customer base and new product launches including MongoDB Mobile. Driven by the strong demand for its database platform, subscription revenues are also expected to see continued growth in Q1.

During the fourth quarter, subscription revenue jumped 87%, bettering third quarter’s growth rate of 59%.

Wall Street expects MongoDB to report a loss of 24 cents per share during the quarter, compared to a loss of 43 cents per share it reported in the year-over period. The company has surpassed market consensus on the bottom line in three out of the past four quarters, meeting the consensus in the fourth.

Amazon threat

Amazon Web Services (AWS) had helped MongoDB expand its database infrastructure. But things turned sour when Amazon launched DocumentDB, its own database that uses the open-source code of MongoDB.

Though MongoDB CEO Dev Ittycheria had called DocumentDB a “poor imitation,” Amazon’s (NASDAQ: AMZN) history of being an industry disruptor makes it a relevant threat to the smaller firm.

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In order to fend off competition, MongoDB has been diversifying its portfolio through the acquisition of mLabs, and more recently,  mobile database platform Realm. The availability of its fully-managed cloud database in over 60 regions is also likely to work in favor of the company.

The Q1 results will give a clearer picture of whether its performance is likely to be dented by Amazon’s onslaught.

Eight out of 13 analysts covering the stock has a Buy rating, while four recommend Hold. MDB stock has a 12-month average price target of $135.60, suggesting a modest 2% upside from the last close.

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