Shares of MongoDB were falling despite the cloud-based database software provider reporting stronger-than-expected results for the October quarter. MongoDB is a highflying bet on the growth of cloud computing, with true Street expectations surpassing the consensus estimates.

Pre-Earnings Performance and Current Status

Heading into the earnings report, MongoDB's stock had soared more than 120% over the year. However, shares were down 5% in premarket trading on Wednesday, reaching $411.99.

Impressive October Quarter Results

Mongo reported revenue of $432.9 million for the quarter, showing a 30% increase from the previous year, exceeding both the company's guidance range of $400 million to $404 million and the Wall Street consensus of $406 million, as tracked by FactSet.

When considering adjusted figures, Mongo posted profits of 96 cents per share, significantly surpassing the guidance range of 47 to 50 cents and the consensus of 51 cents. However, under generally accepted accounting principles, the company experienced a loss of 41 cents per share in the quarter.

Positive Guidance for January Quarter

Mongo's guidance for the January quarter looked promising. The company projects revenue ranging from $429 million to $433 million, reflecting a 19% growth at the mid-range. Adjusted profits are expected to be between 44 and 46 cents per share, surpassing Wall Street's estimate of $418 million and 37 cents.

Improved Fiscal Year Targets

MongoB lifted its revenue target for the January 2024 fiscal year to a range of $1.654 billion to $1.658 billion, compared to the previous range of $1.596 billion to $1.608 billion. Additionally, adjusted profits for the full year are now projected to be between $2.89 and $2.91 per share, an increase from the previous forecast of $2.27 to $2.35 per share. This exceeds Wall Street's estimate of $2.34 per share.

Analyst Expectations and Stock Reaction

Guggenheim analyst Howard Ma had predicted in a research note that MongoDB would easily surpass the Street consensus. However, he had anticipated fourth-quarter revenue guidance would demonstrate growth between 21% and 22%, which did not materialize.

Ma also noted that MongoDB remains one of the most expensive enterprise software stocks worldwide. Although the earnings beat Wall Street's expectations, it fell short of meeting investors' highest expectations, as indicated by the after-hours reaction on Tuesday.

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