Why MongoDB Stock Crashed on Thursday

MongoDB (NASDAQ: MDB) stock got destroyed Thursday morning, falling 20.3% through 10:20 a.m. ET despite "beating" on Q4 2024 earnings last night, after warning 2025 results may look a lot worse.

And I hate to say I told you so, but I did.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Heading into the quarter, analysts forecast MongoDB would earn $0.67 per share, non-GAAP (generally accepted accounting principles), on sales of $519.8 million. MongoDB beat both numbers, with sales of $548.4 million, and earnings nearly double what Wall Street predicted: $1.28 per share.

MongoDB Q4 earnings

So Q4 news was far from horrible. Q4 revenue increased 20% year over year, and full-year revenue grew 19%. Still, the gross profit margin declined to 73% in Q4, and while the company claimed a non-GAAP profit, its earnings as calculated according to GAAP were -$0.20 per share. That improved from the $0.77 lost in last year's Q2, but it was still a loss.

What concerns me most is that free cash flow fell by more than half to just $22.9 million in Q4. For the full year, the company still generated $114.5 million, which was more than the $109.9 million generated in fiscal 2024. The growth rate in FCF production, however, was nothing to brag about -- a meager 4%.

Is MongoDB stock a sell?

And yet, none of the above seems to be what investors are focusing most on today. As I warned last month, heading into Q4 2024 earnings, all eyes would actually be on MongoDB's guidance for 2025 -- and this is where the company really fell short.

Breaking it to you gently, MongoDB guided in line with expectations for Q1, with sales of $526 million, and non-GAAP earnings of $0.63 per share or better. For the full year, however, MongoDB said sales won't exceed $2.3 billion, and earnings could be a full third less than last year's $3.66 per share, ranging from $2.44 to $2.62.

That's the real reason MongoDB stock is down today: Its earnings are about to shift into reverse.

Should you invest $1,000 in MongoDB right now?

Before you buy stock in MongoDB, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and MongoDB wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $718,876!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of March 3, 2025

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends MongoDB. The Motley Fool has a disclosure policy.