MongoDB stock was downgraded Monday to sell by an analyst who pointed to a "treacherous" near-term landscape.
Monnes Crespi Hardt analyst Brian White cut his rating to sell from neutral with a $220 price target. He said the stock will likely face a bumpy ride in the next few months as the software company grapples with weak demand and the departure of a top executive.
"The near-term landscape appears treacherous, competition fierce, software in transition, and the macro fragile," White said in a client note.
MongoDB dipped a fraction to close at 265.63 on Monday. The shares fell sharply last week after the data management software company posted fiscal third-quarter results.
MongoDB beat estimates, but analysts flagged what appeared to be unimpressive results for MongoDB's cloud database service, called Atlas, considered a key business segment especially given high expectations that the company should get a big boost from AI.
CFO Departure Could Jolt Investors
A major leadership change may have also spooked investors. MongoDB last week also announced the departure of longtime chief financial officer, Michael Gordon.
"Not only is MongoDB Atlas mired in a protracted growth slump and void of the powerful tailwind implicit in the industry's gen AI propaganda, but the company is wrestling with a go-to-market transition, and the CFO (also holds the COO title) decided to call it quits last week," White said in the Monday note.
MongoDB will likely still play an important role long term in trends in the enterprise technology market, including AI, White said.
But "in the near-term, we believe there is no place for MongoDB to hide from this onslaught of unforgiving forces," he said.
MongoDB stock has shed roughly 35% year-to-date, falling well below its 21-day and 50-day averages, according to IBD MarketSurge. The shares have a dismal Relative Strength rating of 18, down from an impressive 95 a year ago.
