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Forbes
5 days ago
- Business
- Forbes
What's Happening With MDB Stock?
UKRAINE - 2021/04/29: In this photo illustration, a MongoDB logo seen displayed on a smartphone and ... More a pc screen. (Photo Illustration by Pavlo Gonchar/SOPA Images/LightRocket via Getty Images) MongoDB (NASDAQ: MDB), a prominent database management firm, recently reported impressive Q1 results that greatly surpassed analyst predictions. The company reported adjusted earnings of $1.00 per share on revenue of $549 million, easily exceeding consensus forecasts of $0.66 per share and $528 million, respectively. This robust performance resulted in a 15% increase in MDB stock during after-hours trading. Now, investors looking for stable returns may want to consider diversified investment alternatives such as the Trefis High Quality portfolio, which has showcased impressive performance, yielding over 91% returns since its inception. Separately, see – RGTI Stock: What's Next After An 1,100% Rally? Given MDB's recent stock increase and inherent volatility, you may be questioning whether it remains a sound investment. Despite trading at elevated valuations, we believe MongoDB still has potential for growth. Currently priced at approximately $230 per share, the stock is trading at 8.8x trailing revenues and 55x trailing adjusted earnings. Although these multiples seem high, they are significantly lower than its three-year average price-to-sales (P/S) ratio of 12.2x and price-to-earnings (P/E) ratio of 143x. MongoDB commands these high valuation multiples due to its remarkable financial performance and strong market presence. The company has consistently increased its revenues at an average annual rate exceeding 30% over the past three years. Even though it currently reports GAAP losses, it has a robust adjusted net income margin of 16%. The adjusted net income excludes non-cash items such as stock-based compensation and one-time expenses like acquisition-related costs. Moreover, MongoDB maintains a solid balance sheet, with debt comprising only 0.2% of equity and a high cash-to-total-assets ratio of 68%. MongoDB's Q1 results exhibited solid growth across essential metrics. Overall sales rose by 22% year-over-year, primarily driven by a 26% increase in Atlas revenues, which reached approximately $395 million. The company also experienced significant enhancements in margins, with its reported operating margin improving from -22% in the prior-year quarter to -10% in Q1. Likewise, the adjusted operating margin soared by 900 basis points to 16% over the same period. As a result, MongoDB's net profitability received a significant boost, with adjusted earnings of $1.00 per share, representing a 96% increase from $0.51 in the same quarter of the previous year. Looking forward, MongoDB anticipates Q2 revenue to fall within the range of $548 million to $553 million and adjusted earnings per share between $0.62 and $0.66. These projections are optimistic, surpassing consensus estimates of $549.3 million in revenue and $0.58 in adjusted EPS. MongoDB is strategically situated to take advantage of the artificial intelligence boom through its Atlas Vector Search features. This has established the company as a leading vector database for AI applications. MongoDB has actively broadened its AI Applications Program through new partnerships with prominent AI and technology firms. Additionally, the introduction of cost-reducing vector quantization features, which sustain performance, is anticipated to further propel MongoDB's growth in the dynamic AI landscape. On a separate note, check out – Is CRWD Stock Overvalued At $460? While MDB stock's valuation appears high but defensible, investors should thoroughly evaluate potential risks. MongoDB has historically shown greater vulnerability to economic downturns compared to the broader market. For example, during the 2022 inflation shock, the stock dropped by 76% from its peak, considerably underperforming the S&P 500's 25% decline. Similarly, during the 2020 COVID-19 pandemic correction, MDB decreased by 45% against a 34% decline for the S&P 500. This trend indicates that MDB stock is more exposed to unfavorable macroeconomic conditions. See – Buy or Sell MDB Stock – for more in-depth information. Moreover, there are concerns regarding a potential slowdown in sales growth. Consensus forecasts predict the company's overall sales to increase at a mid-teens average rate over the next few years, a marked deceleration from its impressive 30% average growth rate of the past three years. Consequently, while MongoDB stock may continue to be attractive, investors should carefully evaluate these risks against its strong growth potential and strategic positioning. While you may be inclined to purchase MDB after a strong Q1, investing in a single stock, regardless of its promise, carries risks. If you wish to spread that risk while exposing yourself to substantial upside, consider the High Quality portfolio, which has outperformed the S&P 500 and achieved returns exceeding 91% since inception. Why is that? As a group, HQ Portfolio stocks have delivered better returns with less risk compared to the benchmark index; less of a roller-coaster experience, as evidenced in HQ Portfolio performance metrics.
Forbes
02-06-2025
- Business
- Forbes
Fear Martin Marietta At $550?
UKRAINE - 2021/05/24: In this photo illustration, Martin Marietta logo is seen displayed on a ... More smartphone and pc screen. (Photo Illustration by Pavlo Gonchar/SOPA Images/LightRocket via Getty Images) Martin Marietta Materials Inc (NYSE: MLM) stock fell 27% from its all-time high of approximately $620 in November 2024, decreasing to $453 in April 2025. It then rebounded by about 22% to current levels around $550. Thus, the stock is down roughly 11% since November, despite the company reporting an operating margin exceeding 42% in 2024. In comparison, Meta reported operating margins of 42% in 2024 and has still seen an increase of 9% from early November to now! However, there's an important point to consider: Martin Marietta trades at 32 times earnings. Reversing that gives a meager 3% earnings yield. For reference, Meta—which owns Facebook, Instagram, WhatsApp, and Reality Labs—trades at a significantly lower earnings multiple of 23 times and is growing revenue almost twice as quickly. Meta's revenue has grown by 13% over the last three years, while MLM experienced revenue growth of 6.7% during the same period. So yes, Martin Marietta benefits from consistent infrastructure demand which ensures stable cash flows and strong returns. But at $550 per share, this represents a premium valuation pursuing a growth narrative that simply isn't keeping up. And what happens when the growth fails to meet expectations? That's when reality sets in. See Buy or Sell MLM stock? MLM is frequently regarded as a long-term asset that will gain from sustained urbanization, infrastructure enhancements, and population growth, but history paints a different picture. During the 2008 global financial crisis, its shares plummeted nearly 64%. At the beginning of the Covid pandemic in 2020, they dropped by 49%. Moreover, in 2022, amidst rising inflation and consumer pressure, Martin Marietta faced another setback with a 33% decrease. Not exactly resilient—yet currently, the stock trades at a premium valuation. MLM benefits from stable demand propelled by infrastructure expenditures, particularly owing to government initiatives like the U.S. Infrastructure Investment and Jobs Act (IIJA). Projects involving highways, bridges, and public works necessitate substantial volumes of aggregates — MLM's core product. Furthermore, MLM stands as one of the largest providers of construction aggregates in the U.S., which affords it pricing power and economies of scale. Its size and vertical integration enhance operational efficiency. MLM consistently showcases strong earnings, significant free cash flow, and high returns on invested capital. Yet the broader context is less exciting. As of the first quarter of 2025, Martin Marietta has encountered a notable rise in its debt levels, mainly due to strategic acquisitions and capital investments aimed at expanding its operations. Debt was reported at $5.41 billion as of March 31, 2025, marking a significant increase from $3.95 billion at the conclusion of 2024. The company disclosed a debt to EBITDA of 4.06 for the quarter ending March 2025, which surpasses the industry median. The company reported solid performance for the first quarter of 2025. Revenues totaled $1.35 billion, reflecting an 8% year-over-year increase. In FY26, the company has projected revenues between $6.83 billion and $7.23 billion, indicating a growth of 5 to 10%. Adjusted EBITDA is anticipated to increase by around 9%. That's hardly significant growth for a company valued like a hyper-growth tech stock. Adding to the difficulties are weather-related risks. Operations can be disrupted by hurricanes, storms, or other extreme weather events, which have historically caused production delays and impacted revenue. Despite valuation pressures and macroeconomic risks, MLM's scale provides it with considerable advantages. The company is well-positioned to capitalize on the IIJA, which allocates $1.2 trillion for infrastructure projects over five years. As of early 2025, roughly 66% of highway and bridge funding is yet to be utilized, suggesting a substantial pipeline of projects extending through 2026 and beyond. In Q1 2025, Martin Marietta reported a 6.8% increase in the average selling price of aggregates to $23.77 per ton, driven by organic price/cost improvements and margin-accretive acquisitions. This pricing momentum is likely to persist, bolstering revenue growth. Investing in a single stock carries inherent risks. Conversely, the Trefis High Quality (HQ) Portfolio, consisting of 30 stocks, has demonstrated a history of comfortably outperforming the S&P 500 over the past 4 years. Why is that? Collectively, HQ Portfolio stocks have yielded better returns with lower risk compared to the benchmark index, exhibiting less volatility as illustrated in HQ Portfolio performance metrics.
Business Mayor
15-05-2025
- Business
- Business Mayor
Cybersecurity firm Proofpoint to buy European rival for $1 billion as it eyes IPO
Pavlo Gonchar | Lightrocket | Getty Images Cybersecurity firm Proofpoint announced Thursday it will acquire European rival Hornetsecurity for $1 billion to strengthen its European presence as it explores a return to public markets. The deal marks the single largest acquisition in Proofpoint's history. The cybersecurity industry has seen heightened consolidation in recent months, with companies snapping up smaller competitors to bolster their offerings in an era of AI-fueled cybercrime. In March, Google announced a deal to acquire Israeli-founded cloud security startup Wiz for $32 billion, while last month Palo Alto Networks said it was buying AI-focused cyber startup Protect AI. Proofpoint, which is currently owned by private equity giant Thoma Bravo, said the deal to buy Hornetsecurity would help deepen its expertise in the managed service provider (MSP) ecosystem. Headquartered in Hannover, Germany, Hornetsecurity specializes in managed cloud-based email security services to help protect firms from cyberattacks, data loss, and compliance risks associated with Microsoft 365 and other IT infrastructure. Proofpoint CEO Sumit Dhawan told CNBC the deal would help 'consolidate fragmented security tools into a unified platform that protects people and defends data across the global threat landscape.' 'Generative AI has fundamentally changed the threat landscape, enabling faster, more targeted, and more complex attacks,' Dhawan said in an interview. Small and medium-sized firms 'are increasingly in the crosshairs' of hackers and require 'integrated, high-efficacy' solutions, he added. Path to IPO 'It contributes significantly to our earnings and cash flow going forward, which makes us an even stronger company and business as we explore a return to public markets,' he added. Dhawan said that while there is 'nothing new' to share on Proofpoint's IPO plans for now, 'we remain interested in the IPO market and will explore public markets when we feel the time is right.' Hornetsecurity serves more than 125,000 small to medium-sized businesses and has more than 700 employees, according to a press release. Proofpoint has over 4,500 employees and counts 85% of the Fortune 100 as customers. The deal is expected to close in the second half of 2025, subject to customary closing conditions. READ SOURCE
New York Post
12-05-2025
- Business
- New York Post
Homework tool Chegg to slash 22% of workforce as AI bots steal away students
Chegg on Monday announced plans to slash 22% of its workforce as artificial intelligence bots steal students away from its study and homework help tools. The online platform, which offers textbook rentals and step-by-step homework tutorials, said it has been struggling as Google's AI Overviews squash web traffic, and firms like OpenAI and Anthropic offer discounts and deals to college students on their language models. 'We believe the macroeconomic trends will continue to put pressure on our company and business trends will worsen before they get better,' CEO Nathan Schultz said in a press release. Chegg announced plans to slash its workforce as AI bots steal away customers. Pavlo Gonchar/SOPA Images / Shutterstock 'As part of this, we regrettably will be parting ways with approximately 22% or 248 of our talented team members, which is a challenging decision and one I'm saddened by,' he added. Chegg also plans to close its physical offices in the US and Canada by the end of the year, as well as cut back on new product development and reduce administrative costs. These cost-cutting measures will save Chegg approximately $45 million to $55 million in 2025, and $100 million to $110 million in 2026, the company said. It expects to incur restructuring charges of $34 million to $38 million, mostly from severance payments. Shares in Chegg jumped 4.8% on Monday. Chegg disclosed its subscriber count declined 31%, to 3.2 million, as the company reported its first-quarter results on Monday. Chegg reported a decline in subscribers and subscription revenue on Monday. JHVEPhoto – Revenue plunged 30% to $121 million, as revenue from subscription services fell by nearly a third to $108 million. It suffered a net loss of $17.5 million in the same period. In February, Chegg filed a federal antitrust lawsuit against Google, claiming the search engine's AI summaries, which populate at the top of the results page, have decimated its site traffic and revenue. Google has argued that its AI summaries send web traffic to 'a greater diversity of sites.'
Forbes
05-05-2025
- Business
- Forbes
What To Expect From Cleveland-Cliffs Stock's Q1?
KYIV, UKRAINE - 2024/01/24: In this photo illustration, the Cleveland-Cliffs Inc. (CCI) logo is seen ... More on a smartphone and a PC screen. (Photo Illustration by Pavlo Gonchar/SOPA Images/LightRocket via Getty Images) Cleveland-Cliffs (NYSE:CLF) plans to release its earnings on May 7, 2025. According to our estimates, revenues are expected to reach $5.2 billion, while the consensus estimates for earnings forecast a loss of $0.83 per share. This anticipated loss is mainly due to declining steel prices and weaker demand in essential sectors such as automotive and construction. The company is facing challenges from falling U.S. hot-rolled coil (HRC) prices, which have decreased to approximately $665 per ton. This drop, alongside rising inventory levels and shorter lead times, indicates a weakening market environment that could affect Cleveland-Cliffs' revenue and profitability. The company currently has a market capitalization of $4.0 billion. Over the past twelve months, it recorded $19 billion in revenue, but was operationally loss-making with operating losses of $504 million and a net income of $754 million in losses. However, if you are looking for upside potential with lower volatility compared to individual stocks, the Trefis High Quality portfolio offers an alternative – having outperformed the S&P 500 and generating returns exceeding 91% since its inception. View earnings reaction history of all stocks Here are some insights on one-day (1D) post-earnings returns: Additional insights into the 5-Day (5D) and 21-Day (21D) returns following earnings are consolidated along with the statistics in the table below. CLF 1D, 5D, and 21D Post Earnings Return A comparatively less risky approach (albeit less useful if the correlation is weak) is to examine the correlation between short-term and medium-term returns post-earnings, identify a combination with the highest correlation, and execute the corresponding trade. For instance, if 1D and 5D exhibit the highest correlation, a trader might choose to take a "long" position for the subsequent 5 days if the 1D post-earnings return is positive. Here is some correlation data derived from 5-year and 3-year (more recent) history. Note that the correlation notation 1D_5D refers to the correlation between 1D post-earnings returns and subsequent 5D returns. CLF Correlation Between 1D, 5D, and 21D Historical Returns At times, the performance of peers can affect the post-earnings stock response. In fact, the pricing impact might begin prior to the earnings announcements. Below is some historical data comparing the post-earnings performance of Cleveland-Cliffs stock against the stock performance of peers that reported earnings just before Cleveland-Cliffs. For a fair comparison, peer stock returns also represent post-earnings one-day (1D) returns. CLF Correlation With Peer Earnings Discover more about Trefis RV strategy that has outperformed its all-cap stocks benchmark (a mix of all three, the S&P 500, S&P mid-cap, and Russell 2000), yielding strong returns for investors. Additionally, if you desire upside with a more stable ride than an individual stock like Cleveland-Cliffs, consider the High Quality portfolio, which has surpassed the S&P and achieved over 91% returns since its inception.
