MongoDB vs. Cloudera: Which Software Stock is a Better Buy?
As the economy becomes more digitized, the demand for software solutions will continue to rise. That's why software stocks are often on the minds of i...
As the economy becomes more digitized, the demand for software solutions will continue to rise. That's why software stocks are often on the minds of investors. MongoDB (MDB) and Cloudera (CLDR) are two lesser known names, but still worth a look. Read more to find out which is the better stock.
There is a somewhat respectable argument that there is never a bad time to buy software stocks. Software has become ubiquitous and will continue to shape how companies do business, how educators teach, and how nearly every other facet of the economy functions.
Economic growth is poised to explode following the reopening of the global economy. The late summer and early fall of 2021 might be one of the best times to own software stocks.
The rising economic tide will lift the majority of the boats, including the always-popular software stocks. MongoDB (MDB) and Cloudera (CLDR) are two software stocks with the potential to move to new heights in the ensuing months. But which is a better buy?
Businesses and governments use MDB's database platform. Headquartered in New York City, MDB serves clients in the media, healthcare, financial services, retail, entertainment, and government sectors. MDB is priced at $498.12. The stock's 52-week high is $515, while its 52-week low is $200.50.
MDB is a POWR Ratings disappointment with an overall grade of D, translating into a Sell rating in our POWR Ratings system. The stock has D grades in the Value and Stability components and C grades in the Growth and Sentiment components. Click here to find out how MDB grades in the additional components, including Momentum and Quality.
Out of the 147 stocks in the Software - Application industry, MDB is ranked 127th. You can find the top stocks in this industry by clicking here. MDB's latest strong earnings report revealed revenue growth accelerated in the second quarter. In fact, the stock jumped more than 25% following the earnings release. MDB's top line expanded 44% on a year-over-year basis, coming just shy of $200 million.
MDB's customer count increased by more than 2,000 in the quarter. The company's Atlas cloud database helped spike revenue by more than 80% on a year-over-year basis. Take a look at the analysts' predictions for MDB, and you will find the average target price is $394.39. MDB is currently trading at $498.15, which indicates that analysts believe that MDB is currently overvalued.
CLDR makes and distributes software designed for business data. This software includes applications for everything from data storage to data management, analysis, processing, and more. CLDR is currently trading at $15.95. The stock's 52-week high is $19.35, while its 52-week low is $9.34.
CLDR is amid a takeover at a value that is only slightly higher than its price when it went public. The sale came on the heels of the company's $163 million loss last year. The company lost $187 the year before that. Though CLDR's transition to subscription-based service through the cloud will likely prove prudent, the company will be sold to Clayton, Dubilier & Rice, assuming the deal closes later this year.
CLDR has an overall grade of B and a Buy rating in the POWR Ratings system. The stock has B grades in the Quality and Growth components. Click here to find out how CLDR grades in the rest of the components, including Value, Momentum, Stability, and Sentiment.
Of the 60 stocks in the Software - Business industry, CLDR is ranked 10th. Investors can find the top stocks in this industry by clicking here. In the previous 165 days, CLDR's average upside potential calculated by analyst estimates has been an impressive 26.7%.
Which is the Better Buy?
CLDR is the better of these two software stocks. CLDR's top-10 ranking in its industry combined with its Buy rating in the POWR Ratings make it a strong software stock.
MDB shares were trading at $471.78 per share on Thursday morning, up $0.04 (+0.01%). Year-to-date, MDB has gained 31.40%, versus a 21.67% rise in the benchmark S&P 500 index during the same period.
About the Author: Patrick Ryan
Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management.
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