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MongoDB: A Database For The New Era

Jan. 11, 2021 7:00 PM ETMongoDB, Inc. (MDB)6 Comments
Eric Weiss profile picture
Eric Weiss


  • MongoDB is leading the way within the NoSQL non-relational database space, controlling the strongest market share.
  • The bull thesis for MongoDB relies on MongoDB’s clear-cut leadership in the high-growth non-relational database industry and a vibrant operating momentum.
  • MongoDB bears point toward a stretched valuation, bad quality profile i.e. increasing debt, accounting red flags and dilutive stock options; and the hope that MongoDB will lose its edge.
  • Evidence more strongly suggests that continued top-line growth in MongoDB’s bull story is solid and sustainable in the long term, which in the high-growth tech space has been synonymous with long-term outperformance regardless of accounting questions.

MongoDB in a nutshell

MongoDB (NASDAQ:MDB) is the clear-cut leader within the high-growth, non-relational database SaaS sector. MDB has been and will continue to be an indirect beneficiary of high-growth megatrends such as AI, Machine Learning, IoT (Internet-of-the-Things) and digitalization. Each of these trends, particularly IoT, have sparked an exponential growth in supply of unstructured data resulting in an increasing demand for (NoSQL) non-relational database solutions. Such databases can much more efficiently handle this new flow of data workloads compared to more traditional relational, SQL-based solutions.

Figure 1. Comparison of traditional relational MySQL solutions to MongoDB’s non-relational solutions. (Source: International Data Corporation)

Figure 2. Chart of the growth of stored structured digital data vs stored unstructured digital data in exabytes from 1970-2020. (Source: International Data Corporation)

MDB Offers Exposure to High-Growth DBMS Niches: NoSQL and Cloud Database Solutions

Globally, the DBMS (Database Management System) market reached $58.4bn in 2020 and is expected to grow at a CAGR of 13.81% CAGR from 2021 to 2026. Within this larger space, MongoDB is focused specifically on non-relational (NoSQL) database software that represent a smaller TAM (Total Addressable Market) of ~$3bn but project to reach $22.1bn by 2026, growing at a CAGR of +31.4%. Unlike traditional SQL based databases, non-relational database systems such as those offered by MDB are uniquely positioned to grow alongside many of the digital words hottest megatrends such as IoT, AI, social media and Machine Learning that require a more efficient management of unstructured data.

In a recent study by Gartner, the IT market intelligence firm projects that 75% of all databases will be deployed or migrated to a cloud platform by 2022 with the cloud database subsegment expected to grow at a +17.5% CAGR within the 2020-2025 period. In an effort to synchronize growth alongside cloud adoption, MDB’s Atlas product offers exposure

This article was written by

Eric Weiss profile picture
Analyst at several large banks for my earlier years before switching over to the hedge fund space as a trader. After about 8 years doing that, have been running my own hedge fund for 23 years now. Have done a lot of work with emerging markets as well as event driven investing and bond arbitrage.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

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Comments (6)

mattjohnsonreal profile picture
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Eric Weiss,
What is the role MDB in the Cloud space? Is it a key player in the cloud space? What data base stocks are key players in the cloud space? Thanks
Gartner 2026 NoSQL DB mkt estimates are off by over $5bn, I think. And it’s more complex than just unstructured vs structured: there are app development, migration, security, observability, devops, scaling, etc benefits that applies to SQL data as well. I don’t think you spent enough time on the biggest and most meaningful differentiator and driver of the moat: the technological advantage of the document store. MDB has a fundamentally superior technology and simply reading a StackOverflow survey is insufficient diligence imo.

Also the new low-friction Atlas selling motion is absolutely crucial to cover — it’s a huge disservice to not talk about this and makes me wonder if you’ve listened to/read any of the last three earnings calls. This is a huge incremental driver of the new cust adds this year, and has been providing high quality leads to the direct sales and field teams. It is also essentially a non capacity constrained new business capture opportunity. Sorry if i come off as overly critical; not trying take a view on the valuation in this comment, am just pointing out a major gaping whole here, imo.
treespace profile picture
@bloomburger Wow. I haven't read that much drivel in a long time. What part of "simple open-source document database" did you miss? What propelled the popularity of the project (and that the company is simply riding on top of) was the dirt-simple interface. It's not a complicated data storage option. There is no "moat" whatsoever. What MDB did was simply wrap the service with a subscription model and leverage scaling features of commercial clouds. Again, no moat and frankly they chased away a lot of potential users with their proprietary closed fork of the open source project. I'm really tired of all the clap-trap around this simple open-source project.
Dantes_Will profile picture
Adding that MongoDB used to be an on premise deployment and Atlas, their SaaS/cloud database is growing at 60% yoy. The 31% growth rate will accelerate as SaaS becomes a bigger share of their total revenue. This is one of the few companies I believe deserves the lofty valuation... the database 75B TAM is a real, existing market spend today, not some future, projected, TAM as some other stocks are based on.

And though expensive, it would make a lot of sense for Microsoft to try to acquire it before someone else (Larry Ellison) does. Money is cheap right now, and MDB is a key piece in the future of data.
Eric Weiss profile picture
Would certainly agree MDB is a great acquisition target.
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