Shares of Couchbase, Inc. (BASE) plummeted 5.24% in early trading on Wednesday, despite the company reporting strong first-quarter fiscal 2026 results and receiving positive analyst ratings. The sharp decline suggests that investors may have been expecting even better performance or guidance from the database software provider.

Couchbase reported robust financial results for Q1 2026, highlighting significant growth in several key areas. The company achieved an Annual Recurring Revenue (ARR) of $252 million, reflecting a year-over-year ARR growth of 20% on a constant currency basis. Subscription revenue saw a 12% increase compared to the previous year, and the company maintained a strong non-GAAP gross margin of 89%. Additionally, Couchbase expanded its customer base to 937, with 29% being Fortune 100 companies.

Despite these positive results, the stock's significant drop indicates that market expectations may have been set even higher. Investors might be concerned about the company's ability to maintain its growth rate in an increasingly competitive database market. It's also possible that the company's guidance for the upcoming quarters did not meet Wall Street's expectations, leading to the sell-off.

The stock's decline comes in contrast to several positive analyst ratings. Morgan Stanley raised its price target on Couchbase to $19 from $18, while maintaining an Equalweight rating. RBC Capital and Oppenheimer both reiterated Buy ratings on the stock, with price targets of $22 and $20, respectively. This disconnect between analyst optimism and market reaction suggests that investors may be taking a more cautious stance on Couchbase's near-term prospects.