MongoDB is the pick for Thursday's IBD 50 Growth Stocks To Watch as the growth stock flirts with a 412.67 entry out of a cup-with-handle base. Meanwhile, the relative strength line for MDB stock is at a new high ahead of earnings.
Sales growth for the software database provider has ranged from 29% to 57% over the past seven quarters. Earnings growth has been impressive as well over the past four quarters. In the second quarter, the database technology provider saw sales grow 40% to $423.8 million while earnings of 93 cents per share reversed from a loss of 23 cents in the prior-year quarter.
MongoDB plans to report its fiscal third-quarter results on Tuesday after the market close. Analysts polled by FactSet expect sales of $406 million with earnings of 51 cents a share. In the year-ago quarter, the company reported earnings of 23 cents a share on $333.6 million in sales. For the full year, Wall Street estimates earnings growth of 194%.
Shares are in a second-stage base, according to IBD MarketSmith, meaning the stock could yield higher gains. However, MDB stock has also been hitting resistance around 470 since April 2022.
MongoDB provides a software platform that allows developers to build databases. The company has developed artificial intelligence applications for various tasks.
The company's AI capabilities are particularly useful for automatically converting structured query language, used for programming, and making it development ready. Further, its AI chatbot also has the ability to retrieve information and provide contextual data. The MongoDB Atlas allows developers to build and manage data in the cloud.
What Technical Ratings Tell Us About MDB Stock
MDB stock is in second place among companies in the computer software database group. The group ranks 11th out of 197 industries tracked by IBD. The stock sports an ideal Composite Rating of 99 with an EPS Rating of 82.
MongoDB's Relative Strength Rating stands at a strong 98. That rating has picked up from 5 a year ago as the stock doubled in value from its closing price on Dec. 30, 2023.
Mutual funds own 66% of outstanding shares. The growth stock also boasts strong institutional support with an Accumulation/Distribution Rating of B+.
Among top funds that own MDB stock are the Virtus Kar Mid-Cap Growth Fund and the Allspring Growth Fund.
Exchange traded funds hold MDB shares as well, including the iShares Russell Mid-Cap ETF and the First Trust Cloud Computing ETF.
