Why MongoDB Shares Fell 11.5% Last Month

Shares of database software specialist MongoDB (NASDAQ: MDB) declined 11.5% in December 2019, according to data from S&P Global Market Intelligence. The move was triggered by a polarizing earnings report.

Third-quarter sales rose 52% year over year, landing at $109 million. Adjusted net losses doubled to $0.26 per share. The analyst consensus had been calling for a larger loss of $0.28 per share on approximately $100 million in top-line revenue, so the company exceeded Wall Street's targets. The stock opened the next day's trading more than 10.5% higher.

But the gains did not last. MongoDB's shares closed the same day 1.4% lower, and the plunge continued for a few more days. By the end of Dec. 12, the stock traded 5% below the prices seen just before the earnings report, completing a plunge of 14% from the top of that three-day period. You see, the earnings surprise just wasn't big enough to support MongoDB's lofty valuation.

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Source Fool.com