Cramer contrasts Sandisk’s low valuation with MongoDB’s premium

Jim Cramer used Sandisk and MongoDB to illustrate why investors should compare companies on earnings multiples rather than the dollar price of their shares, according to a Yahoo Finance report on his 2 September Mad Money appearance.

Cramer cited forward price-to-earnings multiples of about 7.3 to 7.5 times for Sandisk, compared with nearly 58 times for MongoDB. He also referred to an average multiple of about 21 times for the S&P 500.

Sandisk operates in hardware and flash storage, while MongoDB provides enterprise database software. Cramer’s comparison focused on the companies’ different share counts and earnings per share, arguing that a nominal share price alone says little about valuation.

MongoDB shares were reported to have fallen 13.5 per cent after a quarterly update that Cramer described as decent but imperfect. The reaction underscored the risk facing companies trading at elevated multiples, where even a solid result may fail to meet market expectations.

Insider Monkey data cited in the report showed Sandisk was held by 128 hedge funds in the second quarter, compared with 69 for MongoDB. The valuation figures remain time-specific estimates attributed to Cramer and the supplied report, rather than definitive measures of investment value.