Valued at a market capitalization of $25 billion, MongoDB (MDB) is a software solutions company that went public in 2017. While the stock has returned close to 1,000% since its initial public offering, it trades 42% below all-time highs. Can MDB's upcoming earnings for its fiscal 2025 third quarter change this trajectory? 

An Overview of MongoDB

MongoDB provides enterprise-facing database management solutions. Its MongoDB Atlas is a cloud database service that accounts for most of the company's revenue. Atlas enables clients to deploy, scale, and manage databases quickly in the cloud. 

Other solutions include the MongoDB Enterprise Advanced segment, which provides enhanced features and support, and its Professional Services business, which offers consulting, training, and support services. 

MongoDB differentiates itself by offering a flexible document database and handling huge volumes of unstructured data sets, generating demand for data-intensive industries such as e-commerce, healthcare, and finance. 

What to Expect from MongoDB in Fiscal Q3 of 2025

MongoDB is scheduled to report its fiscal Q3 2025 results after the close next Monday, Dec. 9. Analysts tracking MDB stock expect it to report revenue of $495.72 million and adjusted earnings of $0.69 per share. In the year-ago period, it reported revenue of $433 million and earnings of $0.96 per share. While revenue is forecast to grow by 14.5%, earnings are on track to decline by 28.5% year over year in fiscal Q3 2025. 

During its last earnings call, MongoDB projected Q3 sales between $493 million and $497 million, operating income between $57 million and $60 million, and earnings between $0.65 and $0.68 per share. At the midpoint, it estimated fiscal 2025 sales, operating income, and earnings of $1.925 billion, $191 million, and $2.40 per share, respectively. 

The Bull Case for Investing in MDB Stock

In fiscal Q2, MongoDB's sales increased by 13% year over year to $478 million. Atlas revenue rose by 27%, accounting for 71% of total sales. The company reported an adjusted operating income of $52.5 million, indicating an 11% margin. 

Despite a challenging macroeconomic environment, MongoDB ended Q2 with more than 50,700 customers, up from 45,000 in the year-ago period. Notably, the number of customers with annual spending of at least $100,000 stands at 2,189. The company reported a net annual recurring revenue (ARR) expansion rate of 119%, which suggests that existing customers increased platform spending by 19% over the last 12 months. 

According to recent reports, the global database market is valued as high as $100 billion. Given that MongoDB’s annual sales are less than $2 billion, it has significant room to expand its top line in the upcoming decade. 

Is MDB Stock Overvalued?

Out of the 31 analysts covering MDB stock, the consensus is a “Strong Buy.” The average target price for MDB stock is $348.22, indicating marginal upside potential from current levels. 

Analysts expect MongoDB to expand adjusted earnings per share of $2.47 per share in fiscal 2025 to $4.20 per share in 2027. Comparatively, free cash flow is forecast to increase from just $109 million in 2025 to $400 million in 2027. So priced at 62.5x forward free cash flow, MDB stock trades at a steep valuation ahead of earnings.