What Happened?

Shares of database as a service company Couchbase (NASDAQ: BASE) jumped 13.7% in the afternoon session after the company reported strong fourth-quarter 2024 results that beat analysts' revenue expectations, with sales up 10% year-on-year. However, revenue guidance for fiscal 2026 suggests a significant slowdown, with projected full-year revenue growth decelerating compared to the 16.8% increase in fiscal 2025​. Non-GAAP operating loss narrowed significantly to near breakeven, helped by improved cost management, and helped earnings beat expectations. Overall, while Couchbase delivered solid execution in the quarter, the guidance suggests that momentum could slow.

Is now the time to buy Couchbase? Access our full analysis report here, it’s free.

What The Market Is Telling Us

Couchbase’s shares are quite volatile and have had 17 moves greater than 5% over the last year. But moves this big are rare even for Couchbase and indicate this news significantly impacted the market’s perception of the business. 

The biggest move we wrote about over the last year was 3 months ago when the stock dropped 23% on the news that the company reported weak third-quarter results and provided revenue guidance for the next quarter, which missed significantly - this matters much more as markets are forward-looking. The company provided conservative guidance due to macroeconomic challenges, limiting insights into upsell, migration timelines, and consumption trends. On the other hand, revenue and earnings came in ahead of expectations during the quarter. Overall, this was a challenging quarter.

Couchbase is up 20.6% since the beginning of the year, but at $18.78 per share, it is still trading 35.8% below its 52-week high of $29.26 from March 2024. Investors who bought $1,000 worth of Couchbase’s shares at the IPO in July 2021 would now be looking at an investment worth $616.78.

Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefiting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story.