MongoDB Favored Over Snowflake at Morgan Stanley
2022.08.15 22:53
Budrigannews.com – In a research note on Monday, a Morgan Stanley analyst told investors the firm favors MongoDB (NASDAQ:MDB) over Snowflake Inc (NYSE:SNOW).
The MS analyst lowered Snowflake’s price target to $274 from $295 in the note.
The analyst explained that “partner conversations on Snowflake remain encouraging with respect to the pace of product innovation, the likelihood that customers will bring new workloads onto the platform and overall bookings trends, we have limited visibility into actual consumption trends in the quarter.”
“With Snowflake having already posted slower revenue growth in 4Q and in 1Q and the read-thru from the public cloud hyper-scalers and from Datadog (NASDAQ:DDOG) suggest that usage trends continue to moderate, we modestly cut our FY23/FY24 estimates on Snowflake,” said the analyst.
They added that while similar lines of thinking also apply to MongoDB, they continue to favor the company within their group of consumption names.
They outlined three reasons why: “1) checks that point to healthy adoption for both Enterprise Advanced and Atlas, 2) we believe the ability for customers to ration near-term consumption is harder for MongoDB (though still possible) than it is for cloud data warehouses like Snowflake and Observability tools such as Datadog and Splunk (NASDAQ:SPLK), and 3) management’s guidance for FY22 already assumes that the slower expansion trends seen in its self-service channel in 1Q spreads across to the entire business – an assumption that may prove conservative for 2Q.”
